Dog Days Market Time Stands Still

August 22, 2016

Mish's Daily

By Mish Schneider


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Victoria De Almeida Artist

Orion’s Dog, the “Greater Dog” constellation or the dog star Sirius appears in the sky in July through August. The dog days are the hottest, most uncomfortable part of the summer. In the early 19th century, the time was perceived as a foreboding period of evil.

Richard Adams used it to describe the English summer in Watership Down: “Now came the dog days - day after day of hot, still summer, when for hours at a time light seemed the only thing that moved..”

Our current dog days have made time stand still in the market. The S&P 500 has had a record of 29 out of 30 days without moving up or down more than 1% on any given day.

Uncomfortable? Yes. For both the bulls and bears.

Perceived as a foreboding period of evil? For some yes. For others, no.

 

For the past two weeks, I have been watching the Russell 2000 primarily, with Retail, Transportation and Regional Banks as close runner ups.

Additionally, the 20+ Year Long Treasury Bonds remain in focus.

Not much to add other than the Russell 2000 either breaks out over 123.68 to head north or breaks below 121 to head south. Retail either clears 46.50 or fails 44.75. Transportation either soars over 144 or plummets under 140. Regional Banks either prosper through 42.00 or falter under 40.00.

The Long Bonds either continue their streak since June 1st of rising above the 50 DMA or they finally flash warning with its failure.

As August draws to a close, the dog days of summer should bring forth the golden days of Autumn. However, with so much at stake, we all wonder whether September will yield a bountiful market harvest or a barrage of falling leaves.

S&P 500 (SPY) Has to clear 219.50 to keep going and hold 217

Russell 2000 (IWM) 123.68 or bust. 121 area support

Dow (DIA) Has to clear 186.88 to keep going and hold 185 area on a closing basis

Nasdaq (QQQ) 117.97 is the place to clear next. 116 support

XLF (Financials) January high 24.27 to clear. 23.90 area is now pivotal support.

KRE (Regional Banks) 42.00 big resistance and next point to clear. 40 key support

SMH (Semiconductors) Meanwhile, sister smh chugs along higher

IYT (Transportation) Must hold 141.25 and get to 144.41

IBB (Biotechnology) 290 key support and needs to get back over 300

XRT (Retail) 46.50 is the place to clear. 45 support

ITB (US Home Construction) Rallied from the 50 DMA into the 10 DMA

GLD (Gold Trust) range of 127.20-129.26 to break

SLV (Silver) Unconfirmed warning phase

GDX (Gold Miners) 28.95 major support

USO (US Oil Fund) 10.60-10.90 support area. 11.35 the weekly MA to clear

XOP (Oil and Gas Exploration) 36.50 support

TAN (Guggenheim Solar Energy) On that 50 DMA again

TLT (iShares 20+ Year Treasuries) 138.70 the 50 DMA which it’s been above since June 1.

GREK (Greece) If gets through 7.50 time to pay attention

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