Has the Market Tamed the Bears?
Two sessions after taking the Grizzly Bears off the endangered list, traders are left uncertain whether or not this recent rally has subdued them or made them angrier. Regardless, this cowgirl finds them docile, suitable for training.
But should our brave cowgirl take her eyes off the bear?
Evidence For Eyes Off:
Confirmed phase changes to Bullish in the S&P 500 and NASDAQ.
Confirmed phase change to Accumulation in the Russell 2000.
Unconfirmed phase change to Bullish in the Dow.
Confirmed Phase change to Recovery in Biotechnology.
Follow through in Semiconductors, Regional Banks, both members of the Economic Modern Family.
Last night I wrote that if the Dow clears the 50 it could turn out the catalyst for phase confirmation in the other three indices. It did.
So why worry about Bears?
Retail maybe and more likely Transportation are two legitimate concerns at this point.
Transportation (IYT) continues to trade nearly half of its average daily trading range. The Average True Range for Trannies is $2.30. Today’s range: $1.35. Furthermore, with the 200 DMA and the chance for a positive phase change at 138.90, IYT closed only marginally above it. It will require a second day to confirm. That means any correction in the rest of the market should only create more weakness in this sector.
Why Are Trannies Important?
Back on February 11th, while the S&P 500 tested the 2016 lows, IYT had already rallied over $6.00 or about 6% off it’s 2016 lows. When I saw IYT’s action, I wrote several pieces about the dichotomy between that and the rest of the market. My accurate conclusion back then, was that the market had bottomed with a rally henceforth.
Now, with IYT trailing behind the rally in the S&P 500, although I would like a bit more evidence, I take that as sign to not load up long or if already long, not to get too complacent. Bears statistically, have increased in number.
Other Evidence?
In a word-commodities. While so many poo poo the gold and miners as done for the year, we prowl for a new buy opportunity.
While very few have followed the grains and the softs, we’ve sat long for months.
While “talking heads” fear that the Fed raising rates while the dollar gets stronger will negatively impact commodities, we remember that those “historical” relationships do not always apply.
So bulls (and cowgirls) remember this. Bears are large with big teeth and claws. Even play behavior like gentle swatting can break your bones. And if you do want to try to tame a bear-at the very least-make sure they’ve had enough to eat before you engage.
S&P 500 (SPY) April high 210.92. With today’s gap, want to see this hold 208.50 Subscribers: Positive Pivots in all
Russell 2000 (IWM) 113.07 the weekly moving average this must close out the week over. Then, 115.05 resistance. Support at 111.
Dow (DIA) Needs a second close above 177.08.
Nasdaq (QQQ) 108 pivotal. Above 109.72 a gap to fill overhead
XLF (Financials) 23.35 weekly chart support. 23.77 pivotal
KRE (Regional Banks) Prodigal with a clean break. Dip buyer as long as it holds 40.85
SMH (Semiconductors) 56.00 pivotal. Then the December high 56.99
IYT (Transportation) Unconfirmed phase change to warning. Has to confirm. Through 140.60 bullish.
IBB (Biotechnology) 272 now support to hold
XRT (Retail) Needs a weekly close over 41.75
IYR (Real Estate) Confirmed Bull Phase
ITB (US Home Construction) Possible reversal after yesterday’s impressive move.
GLD (Gold Trust) Needs to get back above 118. And hold 115.85 area
SLV (Silver) Inside day and confirmed the warning phase. Like better back over 15.65
GDX (Gold Miners) “If this wants to play with investors heads, it will rally off today’s lows which is exactly on the 50 DMA.” Funny-it worked.
USO (US Oil Fund) Unconfirmed Accumulation Phase
OIH (Oil Services) 28.50 on a weekly close is important to clear
XLE (Energy) This has a lot of room higher
XOP (Oil and Gas Exploration) Now, has to hold over around 35.20
TAN (Guggenheim Solar Energy) 21.70 support
TLT (iShares 20+ Year Treasuries) 129 support to hold
UUP (Dollar Bull) 24.55 pivotal with 24.95 substantial resistance
IFN (India Fund) Subscribers: Back in unconfirmed accumulation phase
FXI (China Large Cap Fund) If holds 32 could see 34
RSX (Russia) Subscribers: 17.00 now support-looks good
CORN (Corn) Subscribers: Needs to clear 22.35
DBA (PwrShs DB Ag Fd) Subscribers: Back to unconfirmed bullish and over that channel I showed you last week
DBC (DB Commodity Index) Subscribers: Looks good
SGG (Sugar) Subscribers: Closed over 38.75 which should take this to a new leg higher
JO (Coffee) Subscribers: 17.92 ultimate support
***Market Tone: Short-term Positive 3 Intermediate-Term Positive 6 Long-Term Positive 9
NOTE: *All starred picks are from the automated list of picks (which now includes short picks!) denote that it has one or more of the 18 chart patterns we have used on the radar screen. For example, inside day, 2 days under floor trader pivots, phase change, brick wall or return to the 10 DMA, etc.
Longs
ABBV**
ADSK
AEM**
AET**
AFL
AMGN**
AMZN**
APO
ATI
AVP
BAX
BHP**
CDE**
CLR**
CMI**
CNQ**
COG**
CVX**
DG**
DIA**
DKS
DNR**
EMN**
EQR
ETE
EWG**
EWW
EWY
FCX
GDX**
GDXJ**
GPOR**
HLF
HP**
IP**
JCP
MUR
NBR
NEM**
PXD
SLW**
TSLA
XME
XRX
YUM
Shorts
AAPL
ALK
BBBY
CREE
CTB
DLPH
FEYE**
FSLR
GPRO**
ILMN
JWN
LGF
NKE
RCL
SBUX
STRZA
STX
SWKS
SYNA
TIF
TSO
UAL
VLO
WNR
