How is The Market Like the Hudson River?

November 17, 2015

Mish's Daily

By Mish Schneider

The lower Hudson River is actually at tidal estuary. The Mahican (Iroquois) name “muh-he-kun-ne-tuk” means “the river that flows both ways.”

Strong tides make parts of New York Harbor difficult and dangerous to navigate.

Are you already nodding your head in recognition as to why this info is my lead tonight?

Tuesday, NASDAQ 100 had a golden cross (when the 50 crosses above the 100 Daily Moving Average). The Regional Banks ETF (KRE) had a golden cross last week. That puts these 2 instruments well ahead of the pack with both in Bullish Phases.

Yet those Bullish phases do not tell the whole story.

So, NASDAQ is bullish. However, it closed only marginally up and that is only because of the All-Stars Netflix and Facebook closing well into the green.

Solar City SCTY, on the other side of the river (also in the NASDAQ 100) sold off another 5.5% Tuesday. For the year this has fallen over 50% from its highs.

Are the FB and NFLX upstream currents enough to counteract the downstream currents of others like SCTY that have sunk like an insignificant tugboat trying to navigate the NY Harbor during a rainstorm?

Looking at Regional Banks, KRE, sure it is in a bullish phase. Does that tell that whole story? If you look at the largest bank holding in KRE Bank of the Ozarks (OZRK) that is trading near the 2015 highs.

On the flip side is the S&P 500 Financial ETF (XLF). Sitting between a recovery and an accumulation phase, the big banks like Goldman Sachs are pretty far from their 2015 highs and struggling to stay above their 65-week moving averages.

Since I love to blame the Federal Reserve lately and their untimely rate raising discourse-why should I hold back now? Talk about a “river that flows both ways,” the US dollar, robust like Tall Ships on the Hudson, has thrown many overboard (such as commodities) hoping to be flung a lifesaver.

Oil, gold, steel, copper are all fighting to stay afloat. The Commodity Index Tracking Fund (DBC) sits at the bottom of the river along with the American Eels (they really do live at the bottom of the Hudson River).

Difficult to navigate? Just ask the Russell 2000s (IWM) what he thinks. When Granddad IWM looks in the mirror he sees “Wimpy.”

When NASDAQ looks in the mirror, he sees “Popeye the Sailor Man.”

S&P 500 (SPY) Tried the 200 DMA but couldn’t muster enough wind to close above it. 205 now the pivotal point to hold

Russell 2000 (IWM) Unconfirmed phase change back to bearish with 114.75 pivotal, 112 support and 116.76 overhead resistance

Dow (DIA) Like SPY could not clear the 200 DMA. 175.80 pivotal

Nasdaq (QQQ) 113 overhead resistance. 108.20 best support to hold

Volatility Index (VIX) 22.04 big number if clears

XLF (Financials) Has to clear 24.20 the 200 DMA to be good

KRE (Regional Banks) 44.80 resistance with support now at 42.90

SMH (Semiconductors) A move over 54.22 is best

IYT (Transportation) Still in a bear phase, has to close/clear over 145.60

IBB (Biotechnology) At least Big Bro held over the 50 DMA for a confirmed Recovery Phase-eyes here