Evening Watch List for December 3rd

Mish Schneider | December 2, 2015

Cousin Yellen Holding Up Granddad IWM’s Holiday Bonus

I wrote most of this piece before hearing about the horrific tragedy in San Bernardino. As I have devoted so much of my life to working with people with disabilities, I am so heartbroken that it’s hard to think straight.

Therefore, please read the relatively light-hearted commentary about the market in the spirit it is meant to achieve-as one that helps you keep the machinations of the market in perspective.

Daily:

Occasionally, I feature other relatives of the Economic Modern Family when their visits either appreciably help them out or completely wreak havoc.

For example, earlier this year, the Family visited Uncle Eddie (GREK) as the Greece default dominated the headlines. Ultimately, named after the Uncle in National Lampoon’s Vacation, GREK disrupted the road trip, but the Family made it to Wally World nevertheless.

With Christmas only a few weeks away, Cousin Catherine (whom we shall name Yellen) and Uncle Lewis (USO since he literally throws a match triggering an explosion) and her crew have arrived unannounced in the RV they are also living in. Times are bad but hopes are high.

In National Lampoon’s Christmas Vacation, Clark Griswold, who we can replace with Granddad Russell 2000s, begins to wonder why his boss has not given him his yearly bonus, which he desperately needs.

Cousin Yellen meanwhile, sees “continued growth sufficient to boost jobs and raise inflation.” She expects the increasing labor market to goose inflation rates back to 2%.
Cousin Yellen warned that the U.S. central bank could inadvertently create a recession by waiting too long to raise the interest rates.

The conundrum remains low commodity prices and a strong dollar. With the weak ISM data on Tuesday, many are already looking for recession, regardless what the Federal Reserve does.

Over the coming weeks, I will write more about the plot of Christmas Vacation and how it relates to the Economic Modern Family. For now, let’s see how each are preparing for the holiday given the unexpected arrival of their Cousin and Uncle.

Granddad Russell 2000, is hovering around the pivotal trifecta of resistance between 118.85 and 119.50. We should have a much clearer picture by the end of this week on whether this rally is over or not.

Grandma Retail held 44.00 though has yet to clear the 50 DMA and head back into Recovery.

Prodigal Son Regional Banks could not clear 46.00. His Sciatica got worse forcing him to limp back close to the November 5th high of 44.79.

Semiconductors made a new multi-month high early on but the shock of reading the Fed’s comments along with the conflagration caused by Uncle Lewis (USO) put it under some pressure.

Big Bro Biotechnology’s has chronic Pernicious Anemia. Although, given how poorly IWM performed, it does appear the B-12 shot kept him from completely falling apart as we fear he might.

Transportation’s constipation has turned dire. Back under the 50 DMA and in an unconfirmed bear phase, Yellen’s cheerful talk of an economic Recovery has not helped the Trannies move their bowels.

Currently, TLTs (20+ Year Treasury Bonds), reflect the market’s uncertainty. Regardless of what the Fed’s next moves are, Cousin Yellen made one thing clear-they may not have the ability to ward off recession no matter what they do with the rates. Hence, Granddad IWM may not get that bonus after all.

S&P 500 (SPY) 210 pivotal with 206.60 big support Subscribers: Negative Pivots in all

Russell 2000 (IWM) 119.36 pivotal with 117.75 support

Dow (DIA) 175.75 support with 180 the hurdle to clear

Nasdaq (QQQ) Never like to see new highs and then a failure. However, that reversal will need confirmation

XLF (Financials) If holds 24.25 good and must clear 24.97

KRE (Regional Banks) If 44.79 cannot hold looking at 43.40 support next

SMH (Semiconductors) Leading now with a possible reversal. Again, would need confirmation.

IYT (Transportation) On November 16th made a low of 142.54. If cannot get back over the 50 DMA, look there to hold

IBB (Biotechnology) Could be forming the mother of all bear flags unless it can close over 341.50

XRT (Retail) Tried the 50 DMA but couldn’t do it. Did hold the 10 DMA though

IYR (Real Estate) Broke the 200 DMA-restart-74.20 the 50 DMA

ITB (US Home Construction) If long, should be out of ½ with a trailing stop now

GLD (Gold Trust) If IYT is constipated, this has the opposite issue

SLV (Silver) Totally premature though like to think about these setups: 2015 low 8/25 13.35, today low 13.28-possible reversal pattern-definitely needs 2 confirm with a close over 13.45 on Thursday and some volume

GDX (Gold Miners) Makes the point for why we need a 2-Day confirmation on everything

USO (US Oil Fund) the 2015 low is 12.37 back in August

OIH (Oil Services) Been in a range since early October-it’s getting ready to do something-especially if clears 32

TAN (Guggenheim Solar Energy) 26.50 now support with 28.00 next level of resistance

TLT (iShares 20+ Year Treasuries) Confirmed move to a Recovery Phase. Now has the 200 DMA to clear

UUP (Dollar Bull) testing the 25.95 pivotal area

IFN (India Fund) Subscribers: Over 23.76 looks good if holds at 23.25

CORN (Corn) Subscribers: Watch for follow through over 22.24 and to hold around 21.80

BAL (Cotton) Subscribers: 41.00 max risk and now want to see it clear 42.90

DBA (PwrShs DB Ag Fd) Subscribers: The 50 DMA is at 20.93

SGG (Sugar) Subscribers: Over 36 should keep going

JO (Coffee) Subscribers: Next time, will wait for the cash to confirm a recovery phase

***Market Tone: Short-term Negative 5, Intermediate-Term Positive 4, Long-Term Positive 8

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.

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