November 2, 2015
Mish's Daily
By Mish Schneider
Shortly, I am hostessing a milestone birthday celebration for Keith. As the party planner, I decided to serve serious comfort food for appetizers and dinner, washed down with a very fine champagne.
My thinking is that our guests will feel both sated by the tasty Texas Barbecue and pampered by the Veuve Clicquot.
And then I remembered the other big event I’ve been writing about: the impending shotgun wedding between NASDAQ and the Semiconductors.
Will an offer of satisfying down-home country food along with crisp, chilled bubbly entice the Modern Family to finally RSVP “yes”?
As of October 22nd, Granddad IWM sat on the 50 DMA with no clue what to do from there. Grandma Retail (XRT) had said, “Leave me alone for now,” whilst in her bear phase.
Prodigal Son Regional Banks (KRE) always willing to redeem himself, was leaning towards a yes. Transportation (IYT) who loves a party, was nevertheless eyeballing the September 17th high before taking her gown to be pressed.
Biotechnology (IBB), had sent regrets but left the door open as a wedding crasher if everyone else resolved to show up.
As of the close on Monday, wedding bells fever was in the air. Looking at KRE, who had ended last week looking vulnerable, began this one holding all major moving averages trading inside the range of Friday. 43.91 the point to clear.
Since KRE keeps close tabs on interest rates, checking in with 20+ Year Treasury Bonds (TLT), it found support at last week’s lows. While in a current bear phase, one push over 122.60 brings it back over the 50 DMA.
IWM led all the other indices and cleared away from the 50 DMA plus price resistance not seen since the infamous September 17th spike. Interesting is that that spike high, the 65 week moving average and the 100 daily moving average all converge around 118.50-119.00.
XRT finally confirmed the phase change to Recovery. Yet, Retail remains a weak link until it clears and closes over 46.50.
Trannies have a gap to fill to 148.61. After that, IYTs future party going depends a lot on it clearing 149.86 (Sept 17th high).
Finally, Big Bro Biotechnology (IBB), after more mergers and acquisitions, rallied right into resistance.
But wait. What about Semiconductors, our male-bride? Last week SMH got cold feet. Now, although warming to the idea of holding recent gains, it must clear 54.90 to negate the reversal pattern from October 27th.
His Groom, NASDAQ, made new 2015 highs. Seducer? Alpha-male? Perhaps overconfident?
Wine Spectator reviews Veuve Clicquot as, “Well-knit and balanced…offers a light smoky finish.”
The same could be said for the market. Nonetheless, I still do worry about its light smoky finish becoming a conflagration!
S&P 500 (SPY) Between May and July, there were 6 stabs at the 213 level. Will we see 7 the charm? 210 pivotal now
Russell 2000 (IWM) Best thoughts in commentary above
Dow (DIA) Every time this year the Dow traded on near or above 18,000, gremlins appeared on the wing of the plane. For now the most interesting stat I can give you is the 99% RSI overbought on the weekly chart
Nasdaq (QQQ) In July, this made a high of 114.39 making Monday a new 2015 high and making the old high an important level to hold on a weekly basis
XLF (Financials) Will look for a second close over the 200 DMA
KRE (Regional Banks) Inside day so Friday’s range break one way or another now important
SMH (Semiconductors) 54.22 the 200 DMA to defend
IYT (Transportation) Like most of the sectors, it doesn’t look bearish, but it doesn’t look bullish either-just like it recovered from death’s door
IBB (Biotechnology) As best place to look for speculative money-clearly some has returned. Back over 50 DMA for an unconfirmed recovery phase
XRT (Retail) 46.50 point to clear. Recovery Phase
IYR (Real Estate) A good sign is if this holds Monday’s rally.
ITB (US Home Construction) The overall chart doesn’t look that great to me-looks like a giant top was made. What would change that? A move over 28.00
GLD (Gold Trust) Every correction has put in a higher low. Until that changes, not bearish even if this is in a bearish phase
SLV (Silver) Stopped at a really good point. Over 14.77 should bring life
USO (US Oil Fund) Inside day on the 50 DMA
OIH (Oil Services) Needs to clear 32.00
XLE (Energy) I still trust commodities and commodity related instruments more than equities longer term
TAN (Guggenheim Solar Energy) Held the 50 DMA and now has to clear 30.60
UUP (Dollar Bull) Has to hold the 200 DMA at 25.20
GREK (Greece) Looks good over 11.00
SGG (Sugar) Not only has this rocketed since August, but some commodity traders believe sugar is a lead indicator to early signs of inflation
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