Evening Watch List for November 19th

Mish Schneider | November 18, 2015

Federal Reserve Serves Flounder to the Market

Last night we had a look at the Hudson River and that the Iroquois had named it “the river that flows both ways.”

The analogy to the market is striking representing both the strong and the weak. The River’s reputation as difficult and dangerous to navigate gives us a tangible image for the same troubles our 2015 market has delivered.

Therefore, it should come as no surprise to any of my readers when I continue this analogy after I researched which species of fish inhabit the Hudson.

For this evening, let’s focus on just the salty part of the River off of Manhattan Island and one particular fish that likes salinity.

Flounder.

Taken right from the Federal Reserve’s Open Committee Meeting (FOMC) minutes:

“A number of participants pointed to various reasons why the Committee should avoid a delay in policy firming.”

“Noted that a decision to defer policy firming could be interpreted as signaling lack of confidence in the strength of the U.S. economy or erode the Committee’s credibility.”

Flounder.

“Several participants indicated that, in the current low interest rate environment, it would be prudent for the Committee to consider options for providing additional monetary policy accommodation.”

Many will argue that a December rate-hike remains the Fed’s base case. The market action however, post FOMC minutes, keeps Flounder as our entrée du jour.

1. Flounder have both eyes on one side of their head.

In the market, this one-sided focus is evident with the continued run in the top NASADQ stocks. Amazon, near the recent all-time highs, is in direct contrast to the Flounder’s other, darker side Solar City.

2. Flounder swim on their side.

If we look at the Economic Modern Family, The Russell 2000s, IWM crossed back over the 50 DMA yet is swimming on its side as it ran right into resistance at the 10 DMA.

Transportation (IYT) is trying to swim more upright having cleared both the 50 and 10 DMAs. Semiconductors (SMH) have yet to clear the 200 DMA. Definitely sideways until it does.

Retail (XRT) Bearish but promising, swims laterally until it clears 44.00

Biotechnology (IBB) swims on an angle until it clears 340.00. Regional Banks (KRE) may shed its Flounder status completely and become a Bass (fresh water), especially if it continues the move over 45.21

3. Flounder go into deep water in the summer and reappear in shoal waters during the winter.

The Commodity Index Tracking Fund (DBC) may have moved out of deep water and swam off the bottom of the river. After making a new 2015 low early in the day, it ended on the intraday highs with better than average volume.

Oil and Gold went green with gold miners gaining a respectable 3.29% on the day.

Cotton, Live Cattle, and Cocoa closed up with Corn stabilizing ending the day unchanged.

We will continue to watch for DBC’s reappearance in shoal waters as the winter draws closer.

So, what’s it gonna be Fed? Flounder for breakfast, lunch and dinner? Inquiring swing traders wanna know!

S&P 500 (SPY) Been here before. IN fact just 2 weeks before. 213 big resistance and now 207 big support Subscribers: Positive Pivots in all

Russell 2000 (IWM) Unconfirmed phase change back to recovery with 114.75 pivotal, and 116.76 overhead resistance

Dow (DIA) Until we see the Terror at 18k resolve, this looks like a good rally to overhead resistance

Nasdaq (QQQ) 112.80 pivotal. 110 support and over 115.47 takes it to new highs

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

KRE (Regional Banks) 44.80 pivotal 45.21 good to clear with 46 even better

SMH (Semiconductors) A move over 54.22 is best

IYT (Transportation) 145.30 pivotal and 150 the big overhead resistance

IBB (Biotechnology) 340 resistance, 329 pivotal and 349 big guns 200 DMA

XRT (Retail) Maybe a great double bottom. Need more evidence of that

ITB (US Home Construction) Finally closed over 27.70. Will want to see another day to confirm

GLD (Gold Trust) Inside day off of the new 2015 lows

SLV (Silver) Holding up better than gold.

GDX (Gold Miners) Also holding up better than gold with a possible reversal bottom

USO (US Oil Fund) Likes 13.00 so unless it takes out 12.81 would not be short

XOP (Oil and Gas Exploration) It’s still about 40.00

TAN (Guggenheim Solar Energy) Inside day and has to clear away form 26.00

TLT (iShares 20+ Year Treasuries) Cleared 120 which keeps Flounder on the menu

UUP (Dollar Bull) 2 doji days in a row-paused and ready

CORN (Corn) Subscribers: Has my interest

BAL (Cotton) Subscribers: 2 Inside days over the 50 DMA

SGG (Sugar) Subscribers: Perhaps a buy against 32.00

***Market Tone: Short-term Positive 3, 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.

Tap here to view the September Live Coaching recording:
"How To Vet the Evening Watch Picks"

Longs:

ADBE**
ADSK
AGO
AMGN**
AMZN**
APA
AWAY
BA
BYD**
CAM**
CB
CIEN**
CME
CNO
COST**
CTRP
CUBE**
DHR**
FB**
FBHS**
FSLR
GE**
GOOG**
GT**
HD
INCY**
LNKD
MGM
MNST**
MYGN**
NKE**
PBF**
SBGI**
SCO
SINA**
SNDK
SYNA
TPX**
TQQQ**
TRN**
TSO**
TTWO