November 14, 2017
By Mish Schneider
The Market’s had its share.
Today’s good times: Regional Banks (KRE) jumped from a Distribution to Warning to a Bullish phase.
And, in the course of 2 days.
Good times because the financial sector reacts better in an environment where the Federal Reserve has enough confidence in the economy to hint at a policy of continuing to raise the interest rates.
Today’s bad times: Biotechnology (IBB) went into an unconfirmed Distribution phase.
Bad times because the Biotech sector attracts speculators, which in turn attracts liquidity to the overall market.
Should speculators exit the market-or choose not to enter the market at this time-that leaves the market vulnerable to a lack of liquidity.
Without liquidity, the market either stagnates, rallies or sells off on low volume.
Should speculators disappear from the market, how will any faux move-similar to the faux Led Zeppelin band (Moby Dick), interpret for the market?
Thus far, Transportation (IYT) confirmed a warning phase.
Retail (XRT) is in a bearish phase.
The Russell 2000 (IWM) confirmed the warning phase.
Sister Semiconductors (SMH) remains a bright spot. If SMH holds 102, that could help a faux rally become real.
However, should 102 break, along with the other aforementioned weak Modern Family sectors, the market could see a very real dump.
While Granny Retail keeps it old school, brick and mortar retail chains must see traffic as we start the holiday season.
Even if online shopping is robust, after the New Year, should liquidity die and consumer confidence wane, I expect more bad times coming.
Two indicators to watch all the time, but especially right now, are the U.S. dollar and interest rates.
Should UUP (the dollar ETF) break 24.25, gold and silver will rally. Inflation, already picking up, will increase.
The agricultural commodities might find new interest after years of languishing near their historical lows.
Interest rates, already artificially low, cannot go lower. Well, they can.
However, the positive impact that lowering rates during the last 9 years have had will reverse to impacting fear.
We get it. Bulls want to hold on to the rally like 1960’s rockers want to hold on to Zeppelin.
Nevertheless, good times bad times, time itself marches on.
S&P 500 (SPY) Percentage wise, the move lower suggests a time correction thus far. Other factors to watch for are described throughout the Daily.
Russell 2000 (IWM) It’s all about 144.50 area support
Dow (DIA) 234.87 the 10-DMA needs to clear to be good again
Nasdaq (QQQ) 152 support.
KRE (Regional Banks) Unconfirmed Bullish phase. 55.35 the 50 DMA to hold again
SMH (Semiconductors) 102.00 support
IYT (Transportation) 168.50 level key support
IBB (Biotechnology) Broke the 200 DMA today and holding the 50-week MA
XRT (Retail) Needs to get back over 40
IYR (Real Estate) Support at 82.00
XLU (Utilities) New 2017 highs again today as folks flock to safety
GLD (Gold Trust) Still needs a close over 122
SLV (Silver) Like to see this clear 16.30
GDX (Gold Miners) Needs to clear 23.05 with volume
USO (US Oil Fund) As long as this hold above 10.50, I remain friendly
XOP (Oil & Gas Exploration) Back under the weekly MA-these days, bearish instruments need 2 weeks before they can confirm key levels
TAN (Solar Energy) New 2017 high
TLT (iShares 20+ Year Treasuries) 123.50 the 200 DMA. 125.50 resistance
UUP (Dollar Bull) 24.37 the 200-week MA (broke) with 24.25 next key support
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