Find the Bear

June 9, 2016

Mish's Daily

By Mish Schneider

mdaily20160610

Meow Wolf Santa Fe, NM

Not completely certain what all the animals are in this photo, I do clearly see at least one bear. Whereas most animals are facing front, the most obvious bear sits in a prominent position looking off to the side.

Early on, the most obvious bear-sparked by statements from George Soros-had a prominent position in the market. Looking like once again-6 times now since March 2015-the Dow would crash-land from the 18,000 level, the market nevertheless recovered by day’s end.

Hence, our bear may not have budged from the prominent place, but the strength of the others forced him to look away.

Thus describes the resiliency, which some might call the delusional side of the market.

Interestingly, the metals continued to make impressive gains while the softs took a breather. That made for yet another headscratcher on what exactly is the true relationship among the dollar, interest rates, inflation and equities.

Meanwhile, our Modern Family went bear hunting.

Not their first bear hunt either.

Meant to be taken metaphorically only, when hunting for bears (meaning when the longs want to trap a bear), the number one tip is to follow the food source to locate the bear.

Therefore, we start with Biotechnology (IBB), a major bear food source. Leading us closer to the bear, IBB declined. However, as IBB held the 50 DMA and its Recovery phase, that food source could dry up.

The number two tip is to use wounded game calls and bait to draw the bears into your area. That would be Granny Retail (XRT). XRT is in a bearish phase. Hard to predict, if XRT and IBB decline further, the hunter of bears could wind up eaten by the bears.

Next tip is to use a tree stand for a safe hunting option. That’s where Granddad Russell 2000 steps in flanked by Regional Banks (KRE) and Semiconductors (SMH). Feeling relatively safe by the tree stand, IWM took a siesta and awoke securely holding Wednesday’s lows.

KRE stood guard while SMH brazenly aimed her rifle.

As we end this week we wonder—can the stronger half of the family prevent the weaker half from becoming bear meat?

S&P 500 (SPY) 210.84 support for tomorrow. 213.78 the 2015 high

Russell 2000 (IWM) 118.45 pivotal. 120 substantial resistance. 115.00 major support

Dow (DIA) 178 support. 180 place to retake and hold

Nasdaq (QQQ) 110.60-111 remains resistance. Has to hold 108

XLF (Financials) 23.50 pivotal. 24.00 next point to clear. 23.20 support

KRE (Regional Banks) 42 resistance with 41.00 support then 40.00

SMH (Semiconductors) Awesome close

IYT (Transportation) 140 support. Over 142 better

IBB (Biotechnology) 272.50 the 50 DMA. Back over 275 better and over 280 could see 290 or higher

XRT (Retail) 41.75 is the support to hold. Resistance up to 44.75.