March 22, 2016
Mish's Daily
By Mish Schneider
Before you get into tonight's commentary, tap this link to join me in a live webinar tonight at 9 PM EST. In the webinar I'll show you how I identify great swing trades using the Market Phases I write about here in my daily commentary. Furthermore, my first Megatrend of the 10 Megatrends for 2016 is global Geo-Political concerns. With the unfortunate attack in Brussels today, I help you prepare for all of the Megatrends, plus walk you through the ups and downs of my Modern Family. See you later!
Infallible
Before I begin with today’s topic, a prologue to the Twitter analysis I did last night. As the best source of gaining access to unfiltered news and reading how the world reacts to major events, Twitter is unparalleled. Eerily prophetic, we all woke up to the Brussel news. In situations like that, I find Twitter to be invaluable.
Speaking of the Brussel news…
I’m sure like me, most of you thought that the fear a terrorist attack instills in the market would do two things:
Neither happened.
In the world of my brain that often thinks in song titles and lyrics to describe the market on any given day, I replaced the title “Unforgettable” from the famous Nat King Cole song to the title “Infallible.”
“That’s what you are…” But why?
Are we numb to devastation? Was the incident contained too rapidly? Was the body count not scary enough? I shudder to think about the humanistic ramifications if the answers to any of those questions is yes. Not going there.
So to give Wall Street the benefit of the doubt, I could only come up with one other viable explanation-Central Bank morphine-negative to low interest rates, with talk of more where that came from if need be.
I’ve said this before and I will say it again. I’m feeling safest invested across several classes of commodities. Exposure to equites is limited and I am quite prepared to go short when and if that opportunity presents itself.
Just check out our Little Big View free tool on our site. (there is a link to it in every evening daily if you scroll down). The Market Hot Spots section shows that the biggest % gainers in the last 6 months have been Gold Miners, Sugar, and Utilities.
The biggest losers have been Shipping, Oil, Biotech and Long Volatility. Fear is a loser! I guess that is good news, yet I do find it somewhat bizarre.
The S&P 500 has not rallied very far off the 204 pivotal number. Keep eyes on that. Secondly, NASDAQ has significant resistance between 108-110. The Russell 2000 broke down in December from 110. That is a logical stopping point or the place to break out from.
To me, one cannot make succinct conclusions about where exactly the market is heading next. One can only think in terms of “what if” scenarios.
What if the market’s more fixated on “bad news is good news?” What if the Central Bank’s sedative wears off while the world continues to face terrorism? What if inflation, which can happen as a result of the historically low rates, spins out of control? What if the Banks are forced to raise rates? The “whys” and “what ifs” can make anyone crazy.
In-fal-li-ble, in every way. Infallible, how long that stays? That’s why darling, it’s incredible, that a market so infallible, thinks that we’re all infallible too!
S&P 500 (SPY) Another low volume day with 204 the pivotal area
Russell 2000 (IWM) 110 big level with 108 some minor support
Dow (DIA) 175 pivotal-best looking index
Nasdaq (QQQ) 108 now pivotal.
Volatility Index (VIX) How low can this go?
XLF (Financials) 22.85 the 100 DMA. 23.53 the JCRH
KRE (Regional Banks) 38.50 pivotal
SMH (Semiconductors) Consolidating at these levels
IYT (Transportation) 141 level important support.
IBB (Biotechnology) Starting to maybe look like a double bottom and stopped right at the 50 DMA which it has not been above since August. Wouldn’t discount it if it clears
XRT (Retail) Sitting on the 200 DMA
IYR (Real Estate) 75.78 the JCRH-good support level to hold
ITB (US Home Construction) 26.75 a key area to clear and close above
GLD (Gold Trust) Looking for a new close over 120
SLV (Silver) Longer it holds 15 the better it looks
GDX (Gold Miners) Nothing loss or gained
USO (US Oil Fund) Over 10.65 could clear 10.80 the 100 DMA
OIH (Oil Services) 26.80 good point to hold (the low today)
XLE (Energy) Looks like a gentle correction
XOP (Oil and Gas Exploration) One to watch sitting right above 30.84
TAN (Guggenheim Solar Energy) I will never take my eyes off of this but for now there is not much to see
TLT (iShares 20+ Year Treasuries) Unconfirmed warning phase. 125.96 interesting support level
UUP (Dollar Bull) The chart has what I call a “white cap” formation.
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