Is the Market Over the Rainbow?

November 16, 2017

Mish's Daily

By Mish Schneider

blankRecently, several of the Modern Family phases deteriorated.

The Russell 2000, in a confirmed Warning phase for 2 whole days, today, returned to an unconfirmed Bullish phase.

After holding the major support at 144.50 to the tick on Wednesday, today, IWM rallied up over 1.4%.

Regional Banks (KRE), which had jumped from a Distribution to Warning to a Bullish phase, closed slightly in the red today.

That could have significance as the week ends tomorrow. After all, our Prodigal Son in the financial sector needs to stay in the game.

Biotechnology (IBB), after confirming the Distribution phase, today did exactly what it needed to, cleared 308 and returned to an unconfirmed Warning phase.

That puts IWM, KRE and most likely IBB on the other side of the rainbow.

Who’s that below the rainbow, swimming for his life?

Transportation (IYT) sector, in its warning phase, still holds the ultimate key.

IYT, up 1.7% today, at least got his head out of the water.

However, what would it take to take him over the rainbow?

First, IYT must hold above 172. If not, we are back looking at 168.50-the Mason Dixon line for Tran.

Secondly, IYT must clear 173.00-173.15 and close above there for the week.

Then, IYT has a real shot of traveling to the Land of Oz and helping the rest of the market see the Wizard.

If not, the hot air balloon IYT pilots will take a lot of other market sectors with him on the sad journey back to “Reality, USA”!

Meanwhile, a new, good witch emerged from Munchkin Land.

Granny Retail (XRT), came in to today’s session working off a huge potential double bottom.

XRT even cleared the 50 daily moving average and entered an unconfirmed Recovery Phase.

That makes 40.55 a pivotal area for XRT to hold.

Finally, what else could we possibly say about Sister Semiconductors (SMH)?

Not only does she regularly fly over rainbows-she creates them!

S&P 500 (SPY) 258.25 the pivotal support to hold now

Russell 2000 (IWM) 147 pivotal support and key

Dow (DIA) 234.75 the 10-DMA support to hold

Nasdaq (QQQ) Thanks to SMH-this made new all-time highs.

KRE (Regional Banks) 55.50 the 50 DMA to hold

SMH (Semiconductors) Has to clear over 104.35 and hold 103.35

IYT (Transportation) Unless this clears 173.15, it could still look vulnerable

IBB (Biotechnology) 308 now near-term support. This could make its way to 320

XRT (Retail) 40.55 key pivotal support

IYR (Real Estate) 82.00 pivotal support held

GLD (Gold Trust) Still needs a close over 122-122.50

SLV (Silver) Like to see this clear 16.30

USO (US Oil Fund) As long as this hold above 10.50, I remain friendly

TAN (Solar Energy) If doesn’t get back to 24.99 an exhaustion gap top could be in play

TLT (iShares 20+ Year Treasuries) 123.50 the 200 DMA. 125.50 pivotal 126.80 resistance

UUP (Dollar Bull) 24.37 the 200-week MA

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