December 9, 2015
Mish's Daily
By Mish Schneider
When I woke up this morning, one of my 6 screens I use to watch the markets went dark. Burnt out, finito!
Guess which charts were housed on the screen that crashed-long setups for key sectors and groups.
As one who looks for signs from the Universe (not to be too woo-woo, mainly as something fun and unique to use as a launch pad for writing this daily), I thought about what that possible sign meant.
Here are the 6 charts I had up on that screen:
As one of my other screens houses the 4 indices, Granddad Russell 2000 (IWM) stayed front and center of my purview.
Incidentally, soft, agricultural, metals and energy based commodities are on yet another screen, constantly spied by yours truly for continued basing or bottoming action as we end this year.
Was it a sign from the forces that be when I could no longer easily watch the 6 sectors I deemed as most likely to be trade candidates?
Tuesday, Big Bro Biotechnology “got jiggy with it” running up enough to keep the bear flag breakdown at bay. Wednesday, Bro had an inside day (harami). Thanks Bro, the suspense is killing us.
Transportation (IYT) or the Tiny Tim of the market, did not get any handouts from NASDAQ Scrooge. In fact, QQQs had their own issues, just like Scrooge did when he got visited by the Ghost of Christmas Past. As our Bullish index representative, we are looking for QQQs to hold 111.00 or the 50 DMA.
About those 6 Charts
Solar, which has been posting enormous volume, on Wednesday gapped higher, remained higher, but saw a vicious drop in volume.
Still loving the long-term bullish megatrend that will emerge in Solars, nothing will be impervious to a market crash should we get one. I interpret the low volume with the gap up and green day to mean longs and shorts are sidelined until market direction becomes clearer.
As far as the other 5 ETFs, Granny Retail (XRT) could still be working a double bottom (good), while Regional Banks (KRE) zip lined from a Bullish Phase to a Warning one (not good but at least it held the 200 DMA).
Semiconductors (SMH), although holding above the 200 DMA, has that level in his sights (54.18). A break, not good. A move back over 55.85, a sigh of relief.
I’m watching the inverse to the TLTs (TBTs) as the 4 moving averages I use are converging. With no immediate plans to take a position, it does give me some perspective on the battle between the Fed’s decision to raise rates (which will relay confidence) and what the race to safety if the rates fall further, relays.
Oil and Gas Exploration (XOP) may have found some footing along with the other ETFs in the oil and energy space. What this does for me, is give me a focus away from a lot of equities and strengthens my commitment to the idea that most commodities will trade counter cyclical to the stock market in 2016.
Perhaps from my one screen’s darkness comes the light.
S&P 500 (SPY) “Almost seems though, it needs to get back to 202 level to see real buyers again” Be careful what I wish for, huh? If can get back over 206.50 good thing
Russell 2000 (IWM) Confirmed return to bearish. Makes me sad
Dow (DIA) If holds 174 ok, if not, though see a move to 171.65 level next
Nasdaq (QQQ) Back over 114.20 better. Otherwise, see possible 108.50 as best underlying support
Volatility Index (VIX) Unconfirmed phase change to Recovery
XLF (Financials) Unconfirmed phase change to bearish with support at 23.80 to hold
KRE (Regional Banks) Held the 200 DMA so we will see what happens from here
IYT (Transportation) When you start hoping it will get oversold before it breaks the August lows, not comforting
IBB (Biotechnology) Inside day. Range break will be very telling
XRT (Retail) Interesting inverted doji candle. Want to see it hold 43.68 or more trouble
IYR (Real Estate) Wedged between the 200 and the 100 DMA. Still not that bad looking a chart if holds around 72 down below
ITB (US Home Construction) Back below the moving averages with express train to a bearish phase
GLD (Gold Trust) Over 104 is something, otherwise, not very clear
GDX (Gold Miners) Trying. Over 15 much better
USO (US Oil Fund) I got nothing
XOP (Oil and Gas Exploration) Tried to confirm a bottom but did not. Now, we will look for a hold around 32.00 if good
TLT (iShares 20+ Year Treasuries) Over 122 will look like that flight to safety. Under 120.50 not so much
UUP (Dollar Bull) On 3 moving averages-moment of truth on the strength of weakness going forwar
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