September 27, 2015
Mish's Daily
By Mish Schneider
Bio-dreck-nology
First, let’s hear it for the Agricultural Commodities, many of which had a stellar day last Friday!
Corn, Soybeans, Coffee, Sugar, Live and Feeder Cattle all rallied gaining between 2.24 and 4.64% (Sugar).
Nice when one’s obsession or “will” to help an entire industry bottom out works (for a day anyway!)
All kidding aside, I will continue to harp on Commodities and particularly the 2 basket ETFs DBC and DBA. I do believe the opportunities will continue to present themselves.
Now, onto a more unpleasant subject-Biotechnology (IBB). As Big Brother of my Modern Family, looks like he was kicked out of Granddad’s house.
Of course, Granddad Russell 2000 (IWM) wasn’t exactly a contributing member of the domicile either, unless you consider putting household items up for a fire sale a contribution.
As both weekly and monthly moving averages become super important for longer term perspective, let’s examine a few interesting ones.
Biotechnology had its first close under the 65-week moving average since the summer 2011. The monthly chart has last gasp support at 294.
Granddad IWM broke both the week and month averages thereby putting the 200 week MA in focus.
Grandma Retail (XRT), already under the weekly MA, has one more shot to prove herself a contender if she can hold and close over 45.34 by the end of this month.
Nothing too cheerful to report concerning Semiconductors, unless it closes over 50.15 by September 30th. Same is true in the Transportation sector with noteworthy mileage between it and the monthly MA.
Best and maybe only hope is naturally our Prodigal Son Regional Banks (KRE). Safe for now and holding 40.20-40.50, KRE ends last week respecting long term support.
Which brings me back to…wait for it….Commodities!
Gold (GLD), looking more and more like a worthy safe haven. Oil (USO), sucking up to the 50 DMA, millimeters out of reach. Corn ended the week with an unconfirmed phase change to recovery.
Although DBC and DBA have more work to do, they are getting ready to make an offer to our Modern Family to see if they wish to lease their house with an option to buy.
S&P 500 (SPY) Unless this ends September over 197.50, figure 190 minor support then better at around 173
Russell 2000 (IWM) 110 marginal support but at this point, seems 102.50 could be next
Dow (DIA) Under 162 see 160 minor support. Over 164.50 could help the rest of the market
Nasdaq (QQQ) 98.80 monthly chart support-if defends that’s one thing. If not, down to the 200 weekly moving average we go.
XLF (Financials) Over 23.20 for September close, a fighting chance
KRE (Regional Banks) Best spot of all the major groups if holds and clears over 41.50 early in the week
SMH (Semiconductors) 47.70 support, 50 resistance and pivotal
IYT (Transportation) 142.50 pivotal 140 support
IBB (Biotechnology) Will give Big Bro his bed back if clears and holds over 321.50
XRT (Retail) A monthly close over 45.38 keeps hope alive. Otherwise, looking at 44.00 next closest support
IYR (Real Estate) A great example of liking something but not touching it until chart points clear-they didn’t
ITB (US Home Construction) Another sector of relative strength. And by relative I mean to our hurting Modern Family
GLD (Gold Trust) 110.25 takes this over resistance and maybe to 114 area
SLV (Silver) A close over 15.00 would be a good sign a bottom is in place
GDX (Gold Miners) Confirmed phase change to recovery. Worth watching
USO (US Oil Fund) Waiting for 15.00
UNG (US NatGas Fund) If holds 11.91 and clears 12.40 perhaps we have seen a bottom
TAN (Guggenheim Solar Energy) 26.50 key support.
UUP (Dollar Bull) 25.00 pivotal and over 25.17 clears the 50 DMA
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