I Bet You Miss the Market’s Over-Confident Rooster

March 27, 2018

Mish's Daily

By Mish Schneider

blankAhh-the good ‘ole days..

When everyone loved Facebook; Google was all the rage, and every dip was a buy opportunity.

Those were the Year of the Fire Rooster days.

In 2017, when we learned that each male rooster requires 10-12 hens per day, we thought that was awesome.

Now, we have a Brown Earth Dog. And he’s less predictable.

Facebook has fallen over 20%.

Google (Alphabet) is threatening to confirm a Distribution Phase-first time since pre-election days.

The indices are in warning phases. The Modern Family is as well.

The Long Bonds have rallied back to a Recovery Phase.

The Dollar remains under pressure. Gold is in a bullish phase.

If dogs are succesfully obedience trained, they are man’s best friend unconditionally.

But, a dog who follows every command during a training session, can still have behavioral problems.

Furthermore, when dogs are left alone too long, given that a dog is considered to have the same intelligence as a toddler, you shouldn't be surprised if they create their own amusement.

And that amusement might include destructive behaviors.

Last week, I wrote that the Modern Family were all still intact on the weekly charts.

The only holdout was Granny Retail XRT. She was in an Acculmulation Phase.

Today, Big Brother Biotechnology (IBB) went into a warning phase on the weekly chart, breaking the 50 Week Moving Average.

It closed beneath it last week as well. However, with the rally Monday, we thought perhaps it was a false breakdown.

Now, not so much.

Nevertheless, it’s only Tuesday.

If IBB closes the week under 106, the interpretation, besides the constant political footballing in this sector, is that speculators have lost hope in the bull run.

Brick and Mortar Retail (XRT) is in a Distribution Phase on the weekly chart, breaking below the 200 WMA. The 50 WMA sits lower at 42.47.

The takeaways are that—

  1. XRT, as a large component of the Gross Domestic Product, could spell recessionary forecasts. After a respite in 2017, we could finally feel the domino effect of the dying brick and mortar retail world.
  2. Consumer confidence is fading, which could mean more money going into savings with the little interest people can now collect.

Sister Seminconductors (SMH) holds the 50 WMA. That provides only little comfort however. The 50 WMA comes in at 94.50. That’s far from current levels.

Perhaps, though, the most insidious sector is Transportation (IYT).

If IYT continues lower, a weekly close beneath 177.85 will hurt, just like a bite from an aggressive pitbull.

Dogs are natural predators.

A dog may have anywhere from a very mild urge to chase the roosters to an extremely strong drive to chase and kill them.

No wonder then, this dog market has frightened the roosters. Especailly, dogs with very strong prey drives.

S&P 500 (SPY) 258-that held the market last week-next time will be the 3rd time it fails the 200 DMA. 255.70 is the 50 WMA.

Russell 2000 (IWM) Unless this gets back over 155, 147.80 the 200 DMA and then we are looking at 146.50 the 50 WMA

Dow (DIA) 233.75 the 200 DMA and 230.25 the 50 WMA

Nasdaq (QQQ) Unless this clears 166, expect to see 152.50 the 200 DMA

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