When hiking and you come across torn down barbed wire fence, you might ask yourself:

1. Who tore the fence down?
2. Shall I put a warning sign near the barbed wire to warn others of possible danger?
3. Should I take a risk and cross over to investigate what’s on the other side?

Last week, those of us in the market came across another version of a torn down barbed wire fence.

And, we might have asked ourselves:

1. Who tore the market down?
2. Shall I be duly warned and warn others of the obstacles that could jeopardize our money?
3. Should I risk crossing over the obstacles to see if the market is safe on the other side?

Like repeatedly walking a benign hiking trail, investors have returned over and over again to buy the dips.

In fact, even with the barbed wire gathered in the middle of the trend, traders continue to complacently buy as if there are no obstacles.

Are there warning signs? Have they been adequately marked? Furthermore, should we ignore the signs and keep on riding this bull?

First, who tore down the barbed wire fence?

I see a confluence of “whos”.

Last week, the Semiconductors and Nasdaq 100 never recovered from a week ago Friday’s enormous sell-off. Yet that didn’t stop analysts from recommending that the sell-off presented a buy opportunity.

Clearly, if you knew Bezos (Amazon) was planning to buy Whole Foods, great advice. But if you thought the impending release of the iPhone 8 would spur Apple, wrong.

Meanwhile, the warning signs in Semiconductors appear clearly marked. After a whole week of attempting to rally, SMH closed lower than the week prior.

Should investors cross over that fence anyway?

As long as SMH, IBB, KRE, IYT and IWM hold their 50 daily moving averages and the bullish phases. But keep a pair of wire cutters with you just in case.

The Federal Reserve certainly did their part to tear down the fence.

Raising rates for the third time while ignoring weakening inflation and stagnant wages, the Fed seems mostly focused on shrinking their balance sheet.

In the interim, yields fell and the dollar (Goldman Sachs cut their outlook) didn’t really strengthen. Both signs that the Fed’s agenda is not necessarily for the good of the stock market anymore. Barbed wire.

Then there’s the government and its plethora of issues. Not the least of which is a market still waiting for tax cuts, a health plan and infrastructure programs.

Last week I wrote that we can “assume that the ‘long in the tooth’ Rallysaurus, now on the verge of extinction, was driven by true economics.”

The meteor that hit the market and our Rallysaurus came in the form of some very real weaker economic stats-far more dangerous than barbed wire.

Consumer confidence, housing starts, and retail sales, with the lowest level recorded in 16 months, all hinder economic growth.

Then there’s the Modern Family.

With the exception of brick and mortar retail that stopped hiking all together, the rest continue to lace up their hiking shoes and traverse the trail complacently ignoring the torn down barbed wire.

Should we continue to ride the bull?

If you believe that crossing barbed wire will cause only temporary discomfort, then yes. However, do try to keep the torn down barbed wire fence on your left.

*Come catch me live on the Benzinga PreMarket Prep Show Monday morning at 8:35 AM EST 

S&P 500 (SPY) 240 is where this started the most recent rally from and where this must hold.

Russell 2000 (IWM) Monthly channel top at 142-143 level. Either this takes a bigger lead, or that was it-party over. 140 pivotal.

Dow (DIA) Quiet inside day near the highs

Nasdaq (QQQ) Inside day with 137.40 the 50 DMA support. Has to clear 141.00 to look good again

KRE (Regional Banks) 56.00 pivotal with 53.50 the underlying support

SMH (Semiconductors) 82.35 the 50 DMA. Has to clear 86.15.

IYT (Transportation) Resistance all the way up to 172.89. 170 pivotal. 168 a key support area

IBB (Biotechnology) 291-292 must hold and the elusive 300 must clear.

XRT (Retail) Big key to market. If this can take back 40.00 then Friday could be a good reversal day with plenty of volume

IYR (Real Estate) 81.00 pivotal

XLU (Utilities) 53.25 area near-term support.

GLD (Gold Trust) Still like if holds 118 and clears 120

GDX (Gold Miners) I still want to keep a close watch here-have a sense this will rally. Question is when

USO (US Oil Fund) Fossil Fuel out of favor

XLE (Sel Energy Spdr Fd) Holding the reversal lows and if moves over 67.60 would be something

TAN (Solar Energy) Until this closes a week out over 18.80 not much to say

TLT (iShares 20+ Year Treasuries) Confirmed accumulation day. 126 pivotal. 127.35 resistance, 124 support

VXX (Volatility Index) Here is where the complacency is best measured.