Is the Market Over the Hump?

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Yesterday, we talked about exercising caution when trading on adages.

Plus, we warned you to be careful not to become too extreme in sentiment.

Then, I pointed out how the “inside” sectors were outperforming and perhaps suggesting things aren’t as bad in September as the media wants you to believe.

The first chart is SPY or S&P 500.

A few things worth mentioning.

1. SPY sits on its 50-daily moving average.
2. While momentum remains in a bearish divergence, Real Motion shows that today’s move is consolidation. How the price reconciles, brings us back to the 50-DMA holding or not.
3. The Leadership against the Long Bonds or TLT flipped in favor of SPY. Should this remain the case, the market is risk on. Basically, you want to see SPY outperform TLT in a bullish market.

Onto Transportation IYT and how that continued to outperform today.

IYT while failing to clear the July 6-month calendar range high, did have an interesting candle pattern.

Today’s pattern is an inverted hammer doji, which simply means that the opening and closing price were close and when the hammer is on the lower end of the candlestick, it could imply forced selling.

That tells us that IYT remains the key for the rest of this week.

IYT clears 67.50, we are good.

If the momentum begins to fade and it cannot maintain its outperformance against the SPY, we will get more cautious.

(Think TLT versus the SPY.) TLT is a good flight to safety.

Bulls want to see IYT hold above the 2 major moving averages.

Yesterday’s analysis was this:

“MP Materials (MP) reported and announced a huge buyback program. This company mines rare earth minerals.

Another one in a downtrend since April 2022, we like the bullish divergence on our Real Motion momentum indicator.

Therefore, we will watch for a phase change should the price clear back above the 50-DMA (blue line).”

Today, MP was up around 8%. Timely, huh?

 

Educational purposes only, not official trading advice.

For more detailed trading information about our blended models, tools, and trader education courses, contact Rob Quinn, our Chief Strategy Consultant, to learn more.
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Mish in the Media-Want to see more? All clips here

*Lead-Lag with Michael Gayed 40 minutes and everything we believe could happen in the upcoming year 09-04-24 A better link published soon

Stockpick.app clip and full interview Mish goes through the modern family and a plan 09-02-24

Business First AM As the company celebrates the 10^th year anniversary, Mish shares her thoughts 09-02-24

Yahoo Finance  Mish discusses why you should watch retail and a shift in the tech sector 08-30-24

MoneyFM 89.3 Singapore Mish forecasts where consumer sentiments are headed and her latest stock picks. 08-28-24

Benzinga Pre-Market Prep Mish covers stagflation, conditions to look for, the consumer and few choice stock picks 08-28-24

 

Coming Up:

September 4 CNBC Asia

September 9 Maggie Lake

September 12 Jim Pupluva Financial Sense

September 12 Schwab  

September 27 Real Vision

Weekly: Business First AM, stockpick.app

 

ETF Summary

(Pivotal means short-term bullish above that level and bearish below)

S&P 500 (SPY) 549 the 50-DMA

Russell 2000 (IWM) 212 the 50-DMA

Dow (DIA) 410 pivotal

Nasdaq (QQQ) confirmed warning phase with 455 some support

Regional banks (KRE) 57 pivotal

Semiconductors (SMH) support at 217 the 200-DMA

Transportation (IYT) Has to hold above 65

Biotechnology (IBB) 145-150 new range

Retail (XRT) Confirmed warning with the 200-DMA 73.50 to hold

iShares iBoxx Hi Yd Cor Bond ETF (HYG) Bond traders still like high yield