April 24, 2017
By Mish Schneider
Even this fast-running Roadrunner pauses at the Handicapped Parking sign.
A bird born to run, it can outrace a human. It can kill a rattlesnake. It thrives in the harsh desert landscape.
Last week, the market paused at the many potential handicap signs.
This week however, the market once again proves it is born to run.
Like a Roadrunner, the market eats poisonous prey with no ill-effect.
Like a Roadrunner, the market outraces many humans, especially those who come in bearish.
Like a Roadrunner, the market thrives in harsh landscapes.
Although agile on the ground, Roadrunners do not fly well.
Over the weekend I wrote, “What’s scariest is an exuberant rally on hope rather than substance. If the market rallies too soon and too fast in anticipation, the drop will occur harder and more rapidly when and if the market loses its patience.”
Will today’s rally, agile on the ground, also be able to fly well?
What are the potential handicap signs the market will have to pause at?
Some might argue if a government shutdown over the border wall is a handicap or not. Kidding aside, it’s one reason our market Roadrunner could pause.
Although the French elections ended with a Macron Le Pen runoff, the EU has to get through the second round.
And North Korea, toying with U.S.’s unpredictable foreign policies, detained its 3rd American captive today.
So, can the markets fly well?
Both the Dow Jones and the S&P 500 gapped up over their 50 daily moving averages and back to unconfirmed bullish phases. They need a second close above the 50 DMA to confirm.
NASDAQ 100 has another potential runaway gap. In order for that to confirm 133.48, the old high, must not be touched.
The Russell 2000 really needs to clear back over 140.00
As for the rest of the Modern Family, Semiconductors tested 80.00 and appear likely to fly well above that level and onto new highs.
Transportation is in an unconfirmed bullish phase. Needs to confirm.
Regional Banks and Biotechnology, both still in warning, must tackle and close above their 50 DMAs.
Retail (XRT) has to clear the 200 DMA, not too far above its current price levels.
Roadrunners hold a special place in Native American and Mexican legends and belief systems. The birds were revered for their courage, strength, speed, and endurance.
The oldest known banded Roadrunner lived for about 7 years.
Indeed, so too must the market be revered for its strength, speed and endurance, as well as its courage in the face of obstacles.
However, at 7 years old, the bull market might have only one more run that outpaces humans.
As the market celebrates its 7-year banded bull life, we wonder if it will be issued a handicapped parking permit, or if this will be its last hurrah.
S&P 500 (SPY) Unconfirmed bullish phase so has to hold 235.70.
Russell 2000 (IWM) Must clear 140 and hold 137
Dow (DIA) Unconfirmed bullish phase so has to hold 207.00
Nasdaq (QQQ) Must not trade below 133.50 to keep the new runaway gap in place.
KRE (Regional Banks) The overhead 50 DMA at 55.50 to clear
SMH (Semiconductors) Must clear 80.00
IYT (Transportation) 166.10 now the 50 DMA to hold.
IBB (Biotechnology) This must clear and close over 293 to return to bullish and hold around 290
XRT (Retail) 43.83 the 200 DMA resistance
IYR (Real Estate) 79.00 the 200 DMA to hold. 81 resistance
GLD (Gold Trust) 125 in focus if holds 120
SLV (Silver) 16.85 pivotal and back over 17.00 better
GDX (Gold Miners) Would like a close over 23.50 with a good risk below 22.60
USO (US Oil Fund) Oversold. Needs to get back over 10.45
TAN (Solar Energy) 17.00 major support held-like to see a close over 17.30 now
TLT (iShares 20+ Year Treasuries) 122.00 support coming up
UUP (Dollar Bull) 25.50 area support on multiple timeframes held today
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