June 2, 2015
Mish's Daily
By Mish Schneider
Bill Richardson
Seems like every day, someone in my Modern Family gives us a fright. A mischievous bunch are they!
Tuesday, that distinction went to Semiconductors, who after making new highs on Monday, closed on the intraday lows Tuesday, hence leaving a possible topping reversal candle.
The rest though, pulled their weight or towed the minivan-however you wish to play with the allegory. The Russell 2000 closed green and confirmed the bullish phase, although I would have preferred to see a close over 124.90.
Grandma Retail must have borrowed some cash from the Regional Bank sector as Retail defended the May 6th low, the day it made a reversal. This reversal however, has been meager as it struggles to take out the 50 DMA on every rally since then.
Regional Banks had a strong day, but we already know that it loves the idea of the Federal Reserve raising rates, probably more than most.
Biotechnology traded sideways, seemingly resting. I will note though, that the top from mid-March looms over the group like a tower of doom and will remain as such until Biotechnology clears and closes over 363.50.
Transportation if clears 152, will most likely help the whole market let alone the family, as that was a key breakdown point and also the point that will return this instrument back over a weekly moving average.
The traffic cop or Shepherd continues to look like the Federal Reserve-now try to imagine Janet Yellen in either of those costumes. With the US dollar down significantly and the Interest Rates firming, she directed the Family make a right, blew her whistle for Emerging Markets and Commodities to advance forward, and put her hand up to stop the other 3 indices from crossing at all.
And that’s just a semblance of control of the traffic flow. Where does that leave the rest of the herd?
Since the normal function of traffic lights requires sophisticated control and coordination to ensure that traffic moves as smoothly and safely as possible and that pedestrians are protected when they cross the roads, that leaves the herd huddled on the sidewalk, hoping that the traffic controller doesn’t shut down the whole grid system.
S&P 500 (SPY) Again failed to clear the fast moving average. 212.23 now resistance to clear and 209.92 the 50 DMA to hold.
Russell 2000 (IWM) Confirmed Bullish phase. 204 back to closest pivotal support to hold.
Dow (DIA) 180 pivotal with 179 support and over 181.50 better
Nasdaq (QQQ) Double top possible at 111.08-16 and support to hold now at 108
XLF (Financials) 24.42 support at the 50 DMA with 24.90 the point to clear
KRE (Regional Banks) We’ve learned not to get too excited when this close to making new highs, but at least we are not too nervous
SMH (Semiconductors) Possible topping candle if confirms under Tuesday’s lows
IBB (Biotechnology) Doji candle day-paused
XRT (Retail) Over 99.55 will look better, under 97.00 trouble
IYR (Real Estate) Inside day. Definitely waiting for the Fed.
GLD (Gold Trust) Inside day. Over 115 better if holds 114
USO (US Oil Fund) 20.50 should hold but 20.00 is where the real support is. Over 21.00 will be even more interesting
TAN (Guggenheim Solar Energy) I’m thinking this has bottomed but will need confirmation on that
TLT (iShares 20+ Year Treasuries) Its mirror image TBT is back over the 200 DMA and looking stronger
UUP (Dollar Bull) 25.10 is a key area to hold before anyone gets too bearish
CORN (Corn) A clean reversal off the lows-been here before but worth watching
DBC (DB Commodity Index) Like this now and especially if holds over 17.50
SGG (Sugar) Trying to bottom
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