And Now's The Time, The Time Is Now, To Sing My Song

November 17, 2014

Mish's Daily

By Mish Schneider

“Ramble On” Led Zeppelin

Most likely, in the next few weeks, you will have to endure the horse, sheep and wolf metaphor to possible ad nauseam levels. But for good reasons. After writing this on Sunday, “2014 will conclude evoking the 2015 animal spirit of the sheep, quietly grazing on the hill,” I began this week with that thought in my mind. Sheep make wide circles when they graze as long as there are no wolves nearby.

The market certainly behaved as thus, rambling about, chewing and digesting without much fear, with what appears to us as random action. The metaphor in turn, facilitated keeping us in our current positions, without hyper focusing on the intraday ticks! A theme, I suspect, we can hold on to at least through mid-week.

What would make the market run for shelter? Seems the US has shrugged off the Japanese recession, Putin’s early exit from the G-20, the sad news about the doctor dying from Ebola in a Nebraskan hospital, the threat from certain Republicans on shutting down the government if POTUS signs an executive order on immigration reform, and the NY Giants losing their last 5 games in a row.

In fact, even with the small caps taking out the 116.50 support level yet holding the November low 115.28, the Dow led the way with SPY neck and neck. NASDAQ fell with the pressure of social media stocks while AAPL had a reversal after the early strong start closing lower but holding well above 110-critical support area.

Healthcare, Gold Miners, and Natural Gas had the best gains. We are very much attentive to solar energy and 3-D printing. All could be basing after doing very little throughout 2014. Those sectors just might hold the Ram’s head position as this year concludes and 2015 begins.

S&P 500 (SPY) Although this looks good, continued caution in the Market Internals: Advanced/Decline, which has turned negative along with the McClellan Oscillator, and Up/Down Volume Ratio.

Russell 2000 (IWM) 115.28 the November low to defend and now must really get back over 116.75 to look healthy

Dow (DIA) Resting near highs

Nasdaq (QQQ) Doji day near highs with 102 big area of support

XLF (Financials) Held 24.00 yet didn’t clear 24.10-in the middle can go either way

KRE (Regional Banks) Correcting with no major damage done

SMH (Semiconductors) Inside day and has to clear over 52.30 to keep going

IYT (Transportation) Decent correction from the highs

IBB (Biotechnology) Inside day though unless it takes out 293 again, still on the weak side

XRT (Retail) 89.80 is the support to hold IYR (Real Estate) Back over 75.00-a pretty reliable swing area

ITB (US Home Construction) Hovering at recent highs for 4 days in a row

GLD (Gold Trust) Digestion as expected and held well. SLV too

Metals and Mining (XME) This did ok but GDX did better