Evening Watch List for March 9th

Mish Schneider | March 9, 2016

Caffeine and Glucose-Better for You Than the S&P 500

Coffee and Donuts

Since I write every day, the overheard comments of others, images I see on TV, tweets I read by the news services and traders I follow, and the machinations in my own head become my daily inspiration or muses.

Particularly, I hone in on any input I might receive when the product or thought is attached to a stock symbol, commodity or ETF.

Why Coffee and Donuts Then?

Recently, I have seen and heard a lot of buzz (pun intended) on both.

Some stats. A market research company stated that in the US alone, 41-42% of all breakfasts included coffee and that 14.2% of all breakfasts include a donut. Add to that coffee breaks, the afternoon donut, and the best impetus for the consumption of both- a need for caffeine and glucose.

Considering I have watched coffee and sugar futures (and have written about both) for some time now, I felt the need to look into not only the futures, but also the associated ETFs and then the publicly traded shops that serve both.

My curiosity also led me to compare and contrast how each are doing relative to the overall market, to one another and how the momentum looks for each of them going forward.

Besides futures, I looked at JO, SGG, and CANE. I also looked at the stocks for Dunkin Donuts, Starbucks and Krispy Kreme.

Incidentally, news stories on how caffeine and glucose make you smarter is part of my impetus. Let’s hope consuming both helps make me smarter whilst I write this.

With the S&P 500’s recent rally, I still see more of a potential decline than more upside given both fundamental and technical reasons. So yes, price matters therefore, Tuesday’s action could be the start of more downside or a merely a correction. Jury’s out on that.

Sugar, in a bullish phase, is outperforming the SPY. Long term momentum indicates that upside potential is well, sweet.

Coffee is underperforming the SPY. The most notable feature of coffee futures momentum though, is that when the price in JO recently made a new low, the momentum held above the near-term positive indicator. Quite stimulating!

Starbucks (SBUX) does not look great. Underperforming the SPY with negative momentum. Conversely, Dunkin Donuts (DNKN) is both outperforming the SPY with neutral positive momentum.

Krispy Kreme (KKD) is outperforming the SPY. Momentum wise, short-term has seen a positive switch while longer-term remains more negative.

Maybe I’m no smarter than before my coffee and donut break. Yet it does seem to me that finding another creative way to drive the “commodities” point home to you yet again, you might at least taste test:

Shorting SBUX if the market declines. Buying DNKN and KKD if the market holds or if they continue to outperform the SPY. And… for a real sugar rush, consider going long coffee and sugar futures or their related ETFs.

S&P 500 (SPY) An upward sloping 10 DMA at 197.25 keeps me from saying “batten down the hatches” as this could be a correction after the big move. Subscribers: Negative pivots in all

Russell 2000 (IWM) 105.00 its 10 DMA

Dow (DIA) 167.98 its 10 DMA

Nasdaq (QQQ) 103.50-104 key support.

XLF (Financials) 21.75 key support

KRE (Regional Banks) 36.50 support

SMH (Semiconductors) Unconfirmed Recovery Phase. 51.50 the 10 DMA support

IYT (Transportation) 134.50 level the 10 Dma. The 132 level support

IBB (Biotechnology) Has to hold 260

XRT (Retail) Inside day. If breaks and more importantly, closes under 44.58 we got a reversal in the works with support down at 43.00

IYR (Real Estate) Nasty turnaround taking out 3 candle bodies of price action in one shot. 73.25 the 200 DMA

GLD (Gold Trust) Everything corrects eventually. Even this. Long term bias though, still bullish

SLV (Silver) 14.40 key support

GDX (Gold Miners) Another overbought instrument taking a break

USO (US Oil Fund) 9.25-35 support. That where this rally started from

UNG (US NatGas Fund) Trying to bottom

TLT (iShares 20+ Year Treasuries) 127.50 support and 131 pivotal

RSX (Russia) Subscribers: Lets see what happens at 15.00.

CORN (Corn) Subscribers: Crop report Wednesday

DBA (PwrShs DB Ag Fd) Subscribers: 20.42 is the 100 DMA. Looks great if that clears

DBC (DB Commodity Index) Subscribers: 13.52 is the 100 DMA

JO (Coffee) Subscribers: Over 18.95 looks ripe

***Market Tone: Short-term Positive 4 Intermediate-Term Positive 1 Long-Term Neutral

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

ACAS
AEM
COH
COST**
CREE**
D
DKS**
DLR
DTE
DUK
EL**
EW
FB
FRAN**
FSLR
GGP**
ITUB
JNJ**
KIM**
KORS
LMT**
LULU
LVS
MCD**
NEE
NEM**
NNN
O
PM
QIHU**
SBH**
SFM
SH
SRE**
TEX
TLT**
TRMB**
TRV
WYNN