July 16, 2015
Mish's Daily
By Mish Schneider
Thursday, July 16th was the kick off of the new 6-month Calendar Range. That means that the highs and lows from July 1st to July 15th are now the range to regard until next January.
Goodness, doesn’t that give you angst about how fast time flies?
What makes the current market particularly interesting is the increasing diversity not only among the four indices and various sectors and groups, but also among our reliable Modern Family.
Not a member of the family, NASDAQ clearly had the most impressive un-birthday taking out the July and 2015 trading range. The big guns-Netflix, Amazon, Google are relaying huge corporate profits haven’t slowed down at all.
Why do I watch IWM, XRT, IYT, KRE, SMH and IBB a.k.a the Modern Family?
Corporate profits are great for corporations and investors who hold shares in them (we own 2 of the 3 aforementioned.)
However, to keep a realistic sense of the US Economy, although rates, the dollar, commodity prices also impact the gauge, the Modern Family gives us a reliable framework to assess how the smaller cap companies, goods moving across the country, consumer sentiment, and local banks (many urban and rural folks alike park their money and borrow from the local banks) are faring.
Semiconductors and Biotechnology are thrown into the family as both sectors are excellent measures of speculative sentiment. Add all 6 members together and the gestalt becomes more coherent.
The S&P 500, Dow and NASDAQ are above the July 6-month Calendar Range. Granddad Russell 2000 is not.
Grandma Retail (XRT) is the only sector of the family that took out the 6-month range. All the others (IBB, KRE, IYT, SMH) are either super close (IBB, KRE), within striking distance (IYT) or far away (SMH).
That scenario of only 1 member above the 6-month calendar range currently, certainly keeps any “bullish” complacency at bay. I will look for other members to join the NASDAQs rally sooner rather than late.
Otherwise, I will watch for signs that NASDAQ’s rally is waning.
“Statistics prove that you've
One birthday
One birthday every year
But there are 364 un birthdays
That is why we are all gathered here” Alice in Wonderland
S&P 500 (SPY) 211.28 the 6-month Calendar range high to defend
Russell 2000 (IWM) 126.50 the high to clear on a closing basis
Dow (DIA) 180.72 the 6-month Calendar range high to defend
Nasdaq (QQQ) 110.81 the 6-month Calendar range high to defend
XLF (Financials) Had a runaway gap which means big banks getting richer too-25.37 keeps the gap intact
KRE (Regional Banks) 45.00 next resistance to clear on a closing basis with support at 43.98
SMH (Semiconductors) July range expanded. That means when one way or the other breaks, the follow through will be significant.
IYT (Transportation) Inside day, holding the reversal thus far. Has to clear 148.88 to look better
IBB (Biotechnology) Inside day near the highs
XRT (Retail) Came into the session long after writing this, “Has my vote as the best chance to play catchup to the Biotech and Financial Sectors.” 121.24 to defend now
IYR (Real Estate) Unconfirmed recovery phase
XHB (US HomeBuilders) 36.70 area support to hold
GLD (Gold Trust) Inside day on the lows.
SLV (Silver) Inverted hammer doji
TAN (Guggenheim Solar Energy) Backed from the resistance-now has an inside day
TLT (iShares 20+ Year Treasuries) Holding 2015 lows
UUP (Dollar Bull) Looks good
EEM (Emerging Markets) 39.00 pivotal
Every day you'll be prepared to trade with:
