Ed Cries Wolf

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Mr. Ed Episode Aired June 18, 1961 Written by Lou Derman and Phil Davis

A range is a range of course, of course, and no one can tell the range of its course. That is, of course, unless its course is the January Calendar Range. (Sung to the tune of the Mr. Ed theme song)

Once again, just like last Friday, as the session began, we were ready to pounce as a short seller under the low of the range because as I have mentioned, following the way the range breaks is a high probability trade for the active trader.

Yet, since a range is a range, we exercised patience and did nothing on the short side in the AM, looking instead to either add longs on a short term basis, or at the very least stay the course on our existing trades.

The December low to the January high range although wide, is now over one month in the making. I find that exciting as nothing beats a technical signal than one that has time on its side.

I have focused on the indices mainly, but also appropriate is a visit to the major sectors and groups and where their calendar ranges fall. Biotechnology or IBB the ETF, made a new January high therefore, has a definite bullish bias. Semiconductors (SMH) are in the middle of the January range yet impressively cleared the 50 daily moving average, hence return to an unconfirmed bullish phase.

Interestingly, Real Estate (IYR) began the session making a new January high, however, sold off from there throughout the day. One can say it failed and will see more correction, or that the 6 month range is neutral to slightly positive with support at the January 2nd high of 78.00. Interest Rates of TLTs tested the top of the range on Tuesday, but did not clear to make new highs.

The point is these ranges are an excellent tool to watch and follow near and intermediate term trends either for trading (if you know timeframes to trade in, etc) or at the very least to provide you with information about different sectors and the underbelly of an overall market that is trying to figure it out albeit with mixed signals (accelerating warning phases, in the middle of a solid range.)

Go right to the source and watch its course. It’ll give you the answer that traders endorse. A range that’s on a steady course, the January Calendar Range!

S&P 500 (SPY) 202 pivotal, over 204.70 better

Russell 2000 (IWM) 114.23 huge support and bottom of range. Now, has to clear 116.85

Dow (DIA) 172.12 big number to hold with 176.77 the 50 DMA to clear

Nasdaq (QQQ) 101.35 pivotal, 99 big support and over 103.50 new ball game

XLF (Financials) Closed red making fins a continuing issue to the bulls

KRE (Regional Banks) Gun to head looks lower still

SMH (Semiconductors) Unconfirmed phase change to bullish and needs to hold 54

IBB (Biotechnology) New highs

XRT (Retail) Back under the 50 DMA-another reason market right now, best to keep it simple and have patience

IYR (Real Estate) Possible reversal from new highs

ITB (US Home Construction) Under 24.00 trouble

GLD (Gold Trust) Big volume on the gap higher. Top of a channel on a weekly chart going back to April 2013

GDX (Gold Miners) Unconfirmed accumulation phase

USO (US Oil Fund) Held the recent lows but overall chart heavy-we are flat

TAN (Guggenheim Solar Energy) New multiyear low since September 2013

UUP (Dollar Bull) No blow off since this came back well after Fridays sell off

EWG (Germany): Confirmed a recovery phase