And The Seasons They Go Round And Round

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The Circle Game: Joni Mitchell

First, I would like to thank Geoff Bysshe for filling in for me during my break and doing so with such aplomb!

Second, I would like to thank the Interest Rate Ultrashort TBTs for presenting itself upon my return with a potential island bottom, (TLT’s in reflection, an island top.) Typically a second day confirmation is required. The US Dollar ETF had one in early May and never looked back. If such is the case with the rates, we can go back once again, and look at the potential winners and losers of the fallout of firmer rates.

As for the overall market, with all indices back in bullish phases and NASDAQ continuing its status as the Jewel of the Nile, so to speak, unless the lows of last week are taken out, a bullish bias remains.

For the weekend update Geoff wrote, “Look to follow the direction on Wednesday that takes place relative to what happens Tuesday, especially if that range extends outside the range of last week. Then take note of whether Friday’s data reverses or extends the week’s trend.” Sage advice.

Add a real serious focus on the next interest rate direction to that advice, and September’s stage should be well set.

S&P 500 (SPY) 199.39 last weeks low should market reverse. Otherwise, decent digestion day to start week.

Russell 2000 (IWM) 115.51 last weeks low. Over 117.70 looks really good

Dow (DIA) 171.35 recent high as this needs to clear that level once and for all or if breaks 170.10 selling should come in

Nasdaq (QQQ) Another new high with all the strength in Facebook, Apple and Twitter

XLF (Financials) New high close. 24.35 is not out of the question

KRE (Regional Banks) Almost made it over the 200 DMA, but not quite. Did however, have an unconfirmed phase improvement to recovery

SMH (Semiconductors) Sharply unchanged which is interesting considering it’s on the highs

IYT (Transportation) New high close

XRT (Retail) A second day pause and a doji day-making this very lookable tomorrow

IYR (Real Estate) Good consolidation above the fast moving average

ITB (US Home Construction) Holding the 200 DMA which is a good sign

GLD Before I left, I was one of the few bears out there based on long term charts-although no position, today was a confirmation and sad day for bulls

Metals and Mining (XME) Ugly bearish engulfing day but no real harm done yet on the daily chart with major support at 42.45

USO (US Oil Fund) Looking pretty awful right now, especially under 34.50

XOP (Oil and Gas Exploration) Back under the 50 DMA and has to hold around 77.12 now

TBT (Ultrashort Lehman 20+ Year Treasuries) TLT-Island top if confirms a second day-perhaps this time it is real-especially since island formations are super powerful

UUP (Dollar Bull) Spectacular and another one I have been bullish on for quite some time