December 21, 2015
Mish's Daily
By Mish Schneider
Today’s headline in The Guardian UK Edition: Escaped reindeer makes early Christmas dash round houses
After a supermarket Christmas event, a reindeer escaped and galloped its way down residential streets. To many spectator’s surprise, as the reindeer ran past, a woman dressed in festive gear was chasing it with a rope. Bjorn, not Rudolf was safely returned.
The market action, to begin the week, resembled an imposter runaway reindeer trying to make an early escape ahead of the holiday while a festively dressed woman chases in hot pursuit.
In other words, the green close and inside day in most indices and many instruments (trading range within the trading range from last Friday) could be an imposter rally ahead of the holiday. Or maybe, the start of the real thing?
The Modern Family scattered about, each one telling a different tale. Perhaps that oil hasn’t firmed or maybe because interest rates did, the Russell 2000 (IWM) and the 5 key sectors and groups in his family did not perform particularly well. However, nor did they perform terribly.
The Russell 2000 (IWM) with its inside day, needs to maintain the 112 level and get over 113.05 or the chance of Rudolf (Santa’s real reindeer) showing up by Thursday diminishes.
XRT, SMH, KRE, IBB and IYT have not given the market any substantial reason to believe Bjorn, the imposter Reindeer, will turn into Rudolf. At least not yet.
Semiconductors had a particularly weak start, gapping lower and breaking 53.37 last week’s low. In the end though, SMH came back to close above that level.
Considering our best hope was placed on Biotechnology, IBB did little to encourage or squelch those hopes. Not quite an inside day, it did hold above the 50 DMA and 328.
Next best hope is for Trannies to stop the bleed. With the unusually high volume last week, we definitely need to see another green day Tuesday, preferable one that takes back the 135.00 level.
Prodigal Son, Regional Banks (KRE), held the 65-week moving average at 41.28, so not completely ruled out as the market savior either.
Always encouraging to see that Solar TAN performed solidly with many of that ETFs holdings well outperforming the market.
So if a reindeer by any other name is still a reindeer, and with Bjorn safely back in the hands of his festively dressed woman handler, then we could still see him don a red nose and light Santa’s sleigh towards more rally.
S&P 500 (SPY) 200 turned out as good support. Since I thought a lower open and then run up back over 200 would be stronger, now after the inside day, want to see 200 hold and this return back over 203
Russell 2000 (IWM) 110.28 last week’s low. Inside day. If this can get back over 113, next point is 115.85
Dow (DIA) Inside day sitting on the 100 DMA. 170.89 key to hold or not much until 169. Over 172.50-way better
Nasdaq (QQQ) 109.38 was last week’s low. Inside day holding above the 200 DMA. Back over 112.25 would be strong
XLF (Financials) 23.34 last week’s low. Yet another inside day
KRE (Regional Banks) Inside day and clutch hold of major moving averages on weekly chart. Back over 42.60 would be a big relief.
SMH (Semiconductors) 54.08 is the 200 DMA pivotal. 52.31 underlying support with 53.37 last week’s low and now first area to take back
IYT (Transportation) If last week’s high volume was a blow off bottom in the works, want to see more follow through
IBB (Biotechnology) A move back over 335 would be a reason to cheer. Under more like 328, not so much
XRT (Retail) 42.00 rock bottom support. Over 44 a game changer
IYR (Real Estate) If holds 74.30 and clears back over 75 good
ITB (US Home Construction) Friday low 26.52, Monday’s low 26.60. Some good buying when it gets down to these levels.
GLD (Gold Trust) Exhaustion gap from last Thursday post FED better looking now, but want to see this over 104
SLV (Silver) Like this if can hold 13.60 now
USO (US Oil Fund) Maybe finally ready to find support here and at least get some short covering
XLE (Energy) Not that this is good news, just news-but it did hold the August low
UNG (US NatGas Fund) Maybe a reversal but prefer to see this take back 7.68 at least
TAN (Guggenheim Solar Energy) Over 32.98 clears last week’s high
TLT (iShares 20+ Year Treasuries) 121.75 big support and if breaks that level a sea change (for the better I suspect)
FXI (China Large Cap Fund) 35.37 a good level to hold if this has a chance of heading back over 36.50
Every day you'll be prepared to trade with:
