Are the Bears Warming Up?

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Over the weekend, I focused on the current star of the market, Russell 2000, IWM our Granddad of the Modern Family.

Some others featured:

Transportation (IYT) came within $.32 of matching the all-the time high.

Gold (GLD) and miners (GDX) held their respective 50-daily moving averages and gained amidst an uncertain political climate.

Crude oil traded above $52.00 with Brent on new 2017 highs.

DBA, the agriculture ETF, fell in reaction to the stronger US Dollar, which gained after May’s Brexit comments and Merkel’s clouded victory.

Granny Retail XRT, put some distance between price and the 50 daily moving average-as she needed to do to stay alive.

And the main equities focus, Biotechnology (IBB), closed in decent shape, yet without clearing or breaking critical price levels.

An orchestra sits on stage in front of the audience and warms up their instruments before the concert begins.

Are investors about to hear Bach’s Komm, Süßer Tod, ("Come, Sweet Death"?)

For starters, Speculators need to stay committed to the course.

Biotechnology is our Modern Family Big Brother partially for that reason. Highly speculated, IBB is an accurate measure of market sentiment. Not just with retail investors. Mainly institutional ones.

Secondly, IWM (Russell 2000) has not excited me this much since June 2015.

That was the second time since March 2014, that IWM hit the top of the monthly channel resistance line. Longer term trend trading makes this super reliable.

After June 2015, IWM fell 28% until the end of February 2016.

In 2017, IWM has touched the top of the ascending channel line 6 times. In fact, it has for every month except January, May and August.

Simply put, this month, IWM is above the channel line. That means that if IWM closes out September above 144, it will be the first time ever that has happened. BIG!

Just as big, if IWM fails to close this week out over 144, that will look like a channel failure.

Although Biotechnology is a huge place where specs go to buy or bail, IWM’s fate will have tremendous implications for the near-term.

Bears, like an orchestra, may sound discordant when they warm up pre-show.

Though once the concert commences, it’s the Conductor who decides if the bears or bulls play first violin.

S&P 500 (SPY) 248 support to hold. 250 resistance

Russell 2000 (IWM) At the top of the monthly channel, should September end with this below 144, beware. Otherwise, looks explosive and not overbought.

Dow (DIA) Bye-bye Runaway gap. Hello reversal top unless clears 223.95

Nasdaq (QQQ) Not the first time in an unconfirmed warning phase this year. However, if this week closes under 141.85, could see another $10 drop

KRE (Regional Banks) Tried but failed to close above the 200 DMA. Under 54 could look ominous

SMH (Semiconductors) 87.65 the 50 DMA support as this continues to work off its reversal top

IYT (Transportation) 7/14 made a high of 175.75. Still plugging away so hard to get too negative right now

IBB (Biotechnology) 327-337 range to break one way or another

XRT (Retail) 41.55 recent highs to clear.

IYR (Real Estate) See-saw action within a channel going back to February.

XLU (Utilities) Inside day. Over 54.20 positive

GLD (Gold Trust) 123.90 now pivotal then 122.58 the 50 DMA. Over 125 better

SLV (Silver) Unconfirmed accumulation phase. 16.20 area pivotal.

GDX (Gold Miners) Did you get in? “23.53 a good point to clear with low risk” Now, still has a small gap to fill above

XME (S&P Metals and Mining) over 32.20 better

USO (US Oil Fund) A weekly close over 10.47 good. A monthly close over 10.65-game changer

XLE (Sel Energy Spdr Fd) 68.80 the 200 DMA

OIH (Oil Service Holders) Over 25 now pivotal

TAN (Solar Energy) That High volume reversal pattern should be written down in your journal-I gave you the warning to get out. Now, if 21.00 holds could be chance to get back in.

TLT (iShares 20+ Year Treasuries) 127 resistance area and 126 support

UUP (Dollar Bull) 24.12 the 50 DMA