It was a brutal day if you were a falling knife catcher as the market took those impatient bulls who believed the lows were in out and beat them silly with a 6.5% loss on the Nasdaq, a 6.6% loss on the NYSE, and a 6.1% loss on the SP 500. The losses were made even more damaging by the fact that they hit new lows from the recent rally attempt and volume picked up giving the market a very heavy distribution day.

This distribution day adds to the pressure the market is facing as each and every day passes. The market in terms of the Nasdaq and Nasdaq 100 are now down over 51% from the October 2007 highs. These losses have been extremely damaging to the psychology of many market players and has done some major damage to individuals portfolios.

This sad news is made even more sad knowing

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Airline industry has been one of the most beaten in last year. AMEX Airline Index (XAL) is down more than 50% in last months and but on July it had been even almost 70% down. What is interesting is that recent low has been formed on July. Compared to other industries where recent lows have been reached during October after heavy sell-off. Earlier turnover is due to declining crude oil and gasoline prices which are down more that 50% since July peak.Bad news about global economies will still weigh on crude oil and decreasing demand will send price lower. This will fuel airlines companies. Technically, chart above shows recent low higher than previous bottom. Usually it is strong bullish pattern, the same seen in early 2003 before AMEX Airline Index had bounced. Have a look also to Adam Hewisons video with ...

Airline stocks are enjoying a sharp upswing today. The industry is recovering strongly as fuel prices tumble. And investors are also encouraged by the Delta (NYSE:DAL) and Northwest (NYSE:NWA) merger. But Andrew Snyder says this remains a high-risk sector for stock investors.

More from Today’s Financial News:

After nearly a decade of getting kicked around by the nation’s investors, airlines are finally starting to get some positive attention. More importantly, the barrens of the friendly skies are finally starting to look like profitable ventures.

Notice, however, that I “starting” to “look” like profitable ventures. As of last quarter, the only major airline to post a profit was AMR Corp. (NYSE:AMR), the owner of American Airlines. And its earnings were a mere pittance of total revenues.

All the rest, companies like Southwest Airlines (NYSE:LUV), Delta Air Lines (NYSE:DAL), and United Airlines (NYSE:UAUA), all lost significant

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First, Russia's energy companies successfully lobbied for a bailout, now it is the airline industry. Amid economic woes, Sibir Energy announced it was moving beyond oil into real estate and leisure. Dmitry Medvedev has told his cabinet that their most urgent task was to repair "trust between creditor and debtor," as the RTS dropped 9.52% and Micex slipped 9.11% due to continuing capital flight. Some lending is still happening: Avtovaz, one of the country's largest automotive companies, is concluding negotiations with Vneshekonombank for a credit of $1 billion. In mining, Metalloinvest has ended merger talks with Kazakhmys, which could have created a $40bn (£20bn) metals group before commodities prices drove down the stock price by 25%. Alexei Kudrin announced that capital flight reached $33 billion for August.

In part 1 of this article,  I discuss how sector rotation plays into investing in market bottoms, and linked to my article discussing when and where the S&P 500 will bottom.

I put together a list of 6 stocks I believe are primed for long term growth, and am revealing 1 per day.

Today’s Pick Is:

Alaska Airlines - ALK

Alaska Airlines has been the most resiliant of the airline industry, and had held up fairly well durning this amazing down turn in the market.

From a technical perspective, AK is showing massive divergence in both the MACD and RSI, as well as having the RSI rising. Any break above the downward trendline should be an excellent long term buy signal.

Alaska Airlines Chart - Click To Enlarge

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Quite frankly — anyone who doesn't own gold in this environment has lost their marbles. Consider the following ... — The U.S. economy is experiencing its worst financial crisis since the Great Depression. Fannie Mae and Freddie Mac have failed — the largest financial failures ever seen in this country. And the U.S. Treasury has guaranteed their $5.2 trillion of debt. Lehman Brothers has failed. Merrill Lynch has had to be sold off to help stop its bleeding. The airline industry is broke. The big three auto manufacturers are all but officially bankrupt. And more woes are certainly coming. Lehman Brothers goes belly up!...

The Chicago Tribune announced the possible bankrupcy of UAL Corporation (UAUA), the parent company of United Airlines.  As the company returned just 2-and-a-half years ago from a previous bankrupcy, the market did not take this suggestion well.  Shares plummeted briefly to $3 per share this morning, only to bounce back to the $9 range -- still a 27% drop in share price by noon.

Shares of UAUA had actually been trading as high as around $48 per share in late 2007, but high fuel costs have sent shares to a much lower airspace.  The company seems far from crash-landing, however; 3 analysts in the past month have increased estimate revisions for the September 3rd quarter, and 4 have done so for fiscal year 2008.  Also, the company posted a 41% positive earnings surprise in its most recent quarter earnings results.

Before today's shake-up, Zacks senior transportation industry analyst Ann Heffron, CFA

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The market knows from experience that infrastructure problems can emerge long after a hurricane strikes; early reports following Katrina's landfall in 2005 erroneously said the flooding in New Orleans was not going to be problematic. Stocks fell in overseas trading Monday after crude fell below $111 a barrel in electronic trading on the New York Mercantile Exchange, and their declines will weigh on the Dow Jones industrials and other indexes. First place to look, the airlines compaines and their stocks. Fun stocks to play include: Aug 29 4:03pm ET † Company Name ...

In the battle for supremacy in the aircraft business, there are only two real players - Boeing Company (NYSE:BA) and Airbus (EPA:EAD).  These two companies compete for market share in commercial and military planes, with demand far exceeding each company’s manufacturing ability, and both have a long order backlog.  Some of Boeing’s customers, for example, will wait as long as five years before the planes they ordered are delivered.  And while they fill these orders, both companies must keep innovating.  As oil prices continue to soar, and airline companies like Delta and American Airlines struggle with tight margins, planes that fly faster, fit more passengers, and consume less fuel are at a premium.

And so each company has designed its own new super-plane - for Airbus, the A380, and for Boeing the 787 Dreamliner.  The Airbus plane has already debuted (its first flight was in October 2007),

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We are keeping our Hold recommendation on Gol Linhas (GOL). The company has been enjoying impressive growth in the Brazilian domestic airline industry for the last few years, and the short-term growth outlook remains quite encouraging.

It is important to note that 2007 earnings were highly affected by the infrastructure crisis in the Brazilian airports, a problem that showed a slightly improvement in the first half of 2008. Additionally, 2008 results are now affected by high oil prices. Gol remains one of the fastest growing airlines in the world and with the acquisition of VRG the short-term growth outlook seems positive.

We were very encouraged to see that oil prices have begun to move down from the US$150 per barrel peak recently. The reaction in the airline industry was prompt. This was great news for GOL; nevertheless it is too early to be convinced that the oil problem is

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