February 18, 2015
Mish's Daily
By Mish Schneider
According to the Chinese calendar, 2015 is the Year of the Goat (or sheep), creatures that are typically peaceful in nature but can also be stubborn, while exhibiting herd-like behavior. In China, the Year of the Goat can signify peace, happiness and good harvest.
Like most astrological predictions, interpretations vary. Makes sense given that this is considered the most confusing year of the Chinese zodiac. The Chinese ‘Year of the Yang’ means both the Year of the Goat and the Year of the Sheep. Obviously, these are distinctly different looking animals.
The goat has more of a negative connotation and will be used by those with a pessimistic outlook on the twelve months ahead. A sheep is viewed as more lovable.
Beijing Business Today believes that this year will be a positive one for the stock market. In previous Years of the Goat, Hong Kong’s Hang Seng Index has posted gains. On average, goat years since 1943 have been very good for stock markets with major world indices posting gains of between 15% and 35% with the Hang Seng near the top of that range.
Meanwhile, fortune teller and Feng Shui master Sherman Tai, predicts that the Year of the Sheep/Goat is the year with lots of economic instability and conflicts. He predicts it is “a year of obstacles and extremes, with a lot of disturbances.”
According to Feng Shui expert Lillian Too of World of Feng Shui, this year will present immense opportunity to everyone “to make money, achieve success and attain their goals.”
Partisan Feng Shui analysts? Seems like both pessimists and optimists alike can find whatever prediction suits them.
With that, let’s examine FED policy and the release of the FOMC minutes that stated Interest Rates will remain at zero until further notice. The cuddly sheep theory is that Good Grandma Janet will keep the juice flowing to help the markets (especially Global) from failing. The stubborn goat theory (Bad Grandma Janet) is that the FED allowing rates to firm is the real measure of confidence in the US Economic Recovery. Sheep-passive, Goats-aggressive.
Passive, aggressive but on the same side, we can handle. Wolves in sheep’s clothing? Like to see them stay on the other side of the Volatility Index’s moving averages- or (VXX) under 31.50
S&P 500 (SPY) Inside day near the highs.
Russell 2000 (IWM) New high close
Dow (DIA) Should we be worried about 3 attempts to take out 180.71 the high from December 26th?
Nasdaq (QQQ) New high close
XLF (Financials) 24.90 the January Calendar Range high, and broke the 24.37 support-concerning.
KRE (Regional Banks) Major retreat after FED announcement since this will be better served with higher rates
SMH (Semiconductors) Inside day with 56.64 resistance from December
IYT (Transportation) 165.17 January high
IBB (Biotechnology) Sheep and Goats-Never bet against this group
XRT (Retail) 2 Inside days and I suspect has lots more to go to the upside
IYR (Real Estate) Bounced off the 50 DMA not surprising given the rates announcement
ITB (US Home Construction) Inside day near the highs
GLD (Gold Trust) 116.90 is the resistance which if clears is better
GDX (Gold Miners) Over 21.20 better but really, needs to clear 21.50 and hold 20.00
USO (US Oil Fund) Inside day which means could be just digesting recent rally off the lows. 20.35 is the high to clear to impress
OIH (Oil Services) Inside day
TBT (Ultrashort Lehman 20+ Year Treasuries) Confirmed Recovery phase, first time since September 2014 with an inside day
UUP (Dollar Bull) 24.70 support
EEM (Emerging Markets) Basing out-it’s safe, you can come out now!
EWG (Germany) Resting above the 200 DMA waiting for a move over 29.28 then 29.50
FXI (China Large Cap Fund) Still long term bullish here
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