While the S&P 500 fell 0.7%, the transport sector traded well, Guy Adami, managing director of stockmonster.com, said on CNBC's "Fast Money" TV show. He also pointed out the iShares Russell 2000 ETF (IWM) is still above $121, a bullish sign for the overall market.
Adami said if the market were going to sell off, it would have started to do so by now. He said that because it has lingered near its all-time highs, the S&P 500 seems likely to go higher, he said.
"I like the airlines," David Seaburg, managing director and head of sales trading at Cowen & Company, about the transport sector. Specifically, he likes Delta Air Lines (DAL) and Southwest Airlines (LUV). Seaburg also likes financials and real estate investment trusts.
The $40 level in Delta is critical, according to Tim Seymour, managing partner of Triogem Asset Management. If that level fails to act as support, investors need to sell the stock. Because of attractive valuations the airlines are worth a shot on the long side, he said.
Until recently, Delta has been selling off, Adami said. Investors can stay long the stock, but should use Tuesday's low of $39 as their stop-loss. Adami also says investors should stay long bank stocks headed into next week's Federal Reserve meeting, in particular Goldman Sachs (GS), Blackstone (BX) and U.S. Bancorp (USB).