Ain't No Market High Enough

June 8, 2016

Mish's Daily

By Mish Schneider

mdaily20160610

Meow Wolf Santa Fe, NM

“High” can be used as an adjective, noun and adverb. As an adjective it means “of great vertical extent” and” greater than normal in quantity, size or intensity.” As a noun it’s a “high point, peak, high water mark” and a “state of high spirits or euphoria.”

As an adverb it means “at or to a considerable or specified height” and “Highly” or a rank among others you are comparing something to.

The market uses all 3 parts of speech for the word “high.”

Is the market high as in having moved to a great vertical extent? Indeed. A high point or peak? Perhaps. A state of high? Definitely. Trading at a considerable height? Bears think so. Highly ranked? Depends where one looks.

Why the apology then?

Only on behalf of the Modern Family, who still cannot seem to get in sync with one another. Even as the Dow hits the 18,000 terror level, the family has issues.

Speaking of “high” on all fronts, looking at commodities, almost all robustly rallied again.

Today alone, compounded by the gains that have already occurred:

Coffee-up nearly 7% Sugar-up over 3.5% Oil-up 2% and so on. The US dollar declined further as did the interest rates. Talk about high? That’s what I call the folks who still believe the Fed won’t raise rates soon.

This is most likely why some of the Modern Family see gremlins on the Dow plane now cruising at 18,000.

IBB, seems to like the 275-277 level thus far. Although it could decline from here, Biotech can easily rally back up, running to 290 or higher quickly.

Granny Retail (XRT), still in a bearish phase-which is so January- tries hard. We will give her that. However, I am troubled by these divergences because in the past, all the family fired or retired together.

Transportation IYT confirmed a Bullish Phase. Regional Banks (KRE) appears to behave as if he (Prodigal Son) knows the interest rates are bound to go up. He would like that.

Sister Semiconductors (SMH) may be getting tired. Or, she could just be like me, waiting to see if her Granny and weaker sibs catch up.

And Granddad Russell (IWM)? A follower once got upset when I wrote that Grandpa takes Cialis. I wasn’t making fun of him. My point was and still is, “whatever gets you through the night!”

The Modern Family has asked me to send its apologies for creating doubt in this rally. Particularly for the doubt felt by speculators who keep calling for a peak or believe the market is unquantifiably euphoric. However, they also want me to tell you that a reason they might be so out of synch is that they too are “high.”

S&P 500 (SPY) 211.66 pivotal. 213.78 the 2015 high

Russell 2000 (IWM) 118.45 pivotal. 120 substantial resistance. 115.00 major support

Dow (DIA) 178 pivotal 180 place to hold above

Nasdaq (QQQ) 110.60-111 remains resistance. Has to hold 108

Volatility Index (VIX) Could mean nothing but did close green

XLF (Financials) 23.50 pivotal. 24.00 next point to clear

KRE (Regional Banks) 42 resistance with 41.00 support

SMH (Semiconductors) Traded ½ the normal trading range.

IYT (Transportation) Confirmed the bullish phase with 140 support

IBB (Biotechnology) If holds 275 could see 290 or higher

XRT (Retail) 41.75 is the support to hold. Resistance up to 44.75.

IYR (Real Estate) Strong but I am not finding compelling