Even The Devil's Grandma Was Nice When She Was Young

June 11, 2015

Mish's Daily

By Mish Schneider

Retail Sales for May climbed with an upward revision for April’s number or what The Wall Street Journal’s online publication called, “U.S. Shoppers Go on Buying Binge”.

Binge might be a tad strong but as one who loves poetic license, I will grant them that. Grandma Retail or XRT, as far as equities go, has my full attention. In Wednesday’s daily I wrote,

“XRT tried to clear the 50 DMA and did so barely. With this sector a huge component of the US GDP, the case for continuation of the current trading range increases. After all, this sector measures the state or at least the perceived state of the economy perhaps like none other.”

The Retail Sector is my anointed Granny of the Modern Family. In cases where parents are unwilling or unable to provide adequate care for their children, grandparents often take on the role of primary caregivers. Hence, the Russell 2000s as Granddad and Retail as Grandma.

From a technical standpoint, XRT has to bust out over 100.00 or fail miserably under 96.00 to break the month and half trading range. A move over 100.00, especially as the week draws to an end, just might give Granddad the impetus to climb over its recent highs, 127.00.

I oversimplify the complexities of the market, but not really. Sometimes, especially in a market governed by facts and opinions communicated in nanoseconds, all it takes is a cohesive perception to grease the wheels.

Concerning the Interest Rates as the “Producer” of the market living in the artificial and idyllic Truman-like dome, the TLTs or 20+ Year Long Bonds might have had a strong reversal off of the 2015 lows made on Wednesday. Cueing the sun to come up worked for now!

S&P 500 (SPY) Confirmed return to a bullish phase which means 210.34 the 50 DMA pivotal

Russell 2000 (IWM) 127 is the top of the range. Support now 124.41 the 50 DMA

Dow (DIA) Unconfirmed return to a bullish phase. Has to hold over 180.14

Nasdaq (QQQ) Confirmed return to a bullish phase. 108.60 the 50 DMA pivotal now. Over 110 better still

XLF (Financials) New 2015 highs and looks good for more still

KRE (Regional Banks) Inside day near the highs and a well-deserved rest

SMH (Semiconductors) Has to clear 58.00 and hold 56.75

IYT (Transportation) All about the weekly close-if over 152.10 very healthy sign

IBB (Biotechnology) Made it over 368.

IYR (Real Estate) Over 74.00 better

GLD (Gold Trust) A close over 114 will get us interested

USO (US Oil Fund) Digested the move with 21.50 the big area to clear