I Live My Life A ¼ Mile At A Time. For Those 10 Seconds, Nothing Else Matters

August 17, 2015

Mish's Daily

By Mish Schneider

How Vin Diesel’s quote from (The Fast & The Furious) Describes The Current Market:

This summer, probably for the first time on a work day morning, we took a drive in the convertible with the top down. People were out riding bicycles, walking, dining al fresco and I wondered whether spending every moment in front of the computer screens this summer has been for our highest trading good?

With the 2015 Trading Range alive and well and summer nearly over, when I review a lot of the discretionary trades (our automated systems do their own thing), I now see how this year’s relentless trading range glaringly contrasts to my and many others overthinking!

True, information moves at blinding speeds so we traders think we need to watch the ticks. However, perhaps that fast-moving communication is partly the reason why the market remains in this range.

Traders have immediate access to so much information, creating information overload, we must now process that information immediately just to keep up.

Perhaps, quick access, quick assimilation followed by quick trading decisions have actually created this trading range. The Trading Range reflects the equal and opposing forces between the bears and bulls. Forget bulls and bears, we have all become sheep!

Over the weekend I wrote that, “The longest period of price consolidation in the Dow (DIA) 2015 happened between March and mid-May. Prices ranged from 175.50 to 181.00. Furthermore, when the Dow’s price has spiked below, the duration of time spent near those lows has been really short.”

Monday’s session, the Dow opened lower and then, like a sheep in the pasture looking for the comfort of its herd, trotted up to find that 175.50 level, closing at 175.68.

NASDAQ and the Financials

NASDAQ and the Financials, both ending last week in bullish phases, did their parts on Monday to lead the Dow to pasture.

Refusing to be boxed-in, (XHB) also began this week making yet another new 2015 and multiyear (since 2007) high.

So maybe, as summer winds down, we should all hit the open road in that convertible and instead of worrying about the potholes, enjoy the journey (for at least 10 seconds at a clip)!

S&P 500 (SPY) Back in an unconfirmed bullish phase. That’s the 22nd time it’s changed phases this year-hello life at a ¼ mile at a time!

Russell 2000 (IWM) Rallied right into the 200 DMA with 120 support to hold

Dow (DIA) 174.44 pivotal. Not dismissing that 177 is probably a good place to go short should it get there

Nasdaq (QQQ) The leader leading with resistance at the 111-112 level

XLF (Financials) Looks good

KRE (Regional Banks) 42.85 support, 43.60 pivotal and 44.20 resistance

SMH (Semiconductors) Reversal off the lows but without the spectacular volume

IYT (Transportation) I like this and have for last 3 weeks-it is basing

IBB (Biotechnology) “Over 367 would be a good start.” Closed above there

XRT (Retail) Cleared 96.93 the 200 DMA

IYR (Real Estate) Heading to the 200 DMA resistance 77

GLD (Gold Trust) Maybe it’s bottomed, but if rates do firm, wonder if this is where one should have money.