September 5, 2017
By Geoff Bysshe
The market got a little spooked today.
Congress is back in session.
Cause and effect?
Maybe, because pretty soon hopes of what might be accomplished in by Washington will be met with reality.
However, here’s what I’m focussed on.
Bonds (TLT) rallied 1.59% which is the biggest 1 day percentage move since June of 2016. Granted there were 2 other 1.5%+ moves in 2017, but this is still a very notable move.
The TLT move may have been enhanced by the weekness in stocks, but its rise is also likely due to an increasing belief that interest rates will stay lower for longer.
A lower for longer sentiment for interest rates is not what banks want, and thus, KRE also had an unusually large day. However, KRE’s move was down and breaking a very significant support level.
The moves in KRE and TLT paint a bearish picture, however the market leaders may have been shaken up, but they were not broken.
As you’ll read in the more detailed ETF analysis below, there were plenty of interesting areas of strength and support.
Statistically September is the weakest month of the year. This doesn’t mean it has to go down, but we should be prepared for a bumpy ride.
As of right now the Modern Family is mixed, but trying to support one another.
S&P 500 (SPY) Stopped at the 50-DMA. Look for support at 244.60. Resistance at 247.60 and then needs to close well over 248 to get going, and watch the all-time high of 248.91.
Russell 2000 (IWM) Closed back under the 50-DMA. Warning Phase. Today’s low is important support to hold and then 137.25 and 136.25. Resistance at 139.70 and then 141 and 142.30.
Dow (DIA). Stopped at the 50-DMA. Support at today’s low then 216.60 and 215.70. Resistance at 219, 219.50 and then 220.
Nasdaq (QQQ) Stopped at 10-DMA.. Look for support around 143.60 and 142. Resistance is at 145.50, 146 and then the highs at 146.60.
KRE (Regional Banks) Major breakdown closing under 51. Negative until closes over 52. Maybe support at 50?
SMH (Semiconductors). Held 10-DMA. Look for support at 87.
IYT (Transportation) Stalled at the 50-DMA. Look for support at 166 and resistance at 170.
IBB (Biotechnology) Held up well. Stopped at support around 330-328.80
XRT (Retail) Held up very well. The 39-38.40 area should now be a floor of support. Big resistance still at 40, but I expect it to be broken if the general market remains bullish.
IYR (Real Estate) Closed over 81. Key level to break is 81.60.
XLU (Utilities) Support at 54.40 and 53.60.
GLD (Gold Trust) Strong up day. Support at 126 and 124 and resistance at 128
GDX (Gold Miners) Strong up day. Look for support at 24.75, 23.90 and 23.50 Expect resistance at 25.60
SLV (Silver) Look for support at 16.80 then 16.30-.20. Big resistance at 17.50.
USO (US Oil Fund) Following the pattern of a major bottom. Look for a close over 10. Today’s gap means no real support until 9.67, and must hold 9.30. Big resistance at 10 at 10.25.
UNG (Natural Gas) Gapped down into the base. Be patient. Here’s what has been written here for weeks… “Still in a bear trend according to phases. If it has a 30-min Opening Range breakout over 6.75 it could indicate a multi-week bottom. The all-time low is 5.78, the weekly base high is 9.80. So the risk is just over a $1 and the first target is just over $2, but if it breaks $10 then $12 is the next stop.”
KOL (Coal) Pulled back to the 10-DMA. Look for support at 14.90-.80.
TAN (Solar Energy) 22.00 resistance and 21.00 support. That’s all you should focus on.
TLT (iShares 20+ Year Treasuries) Complete sentiment shift from Friday, but up is the current trend so not completely surprising. Look for support at 128.50 and 128. Friday’s low is now pivotal for the bull move that began in early July. Gap fills at 129.60.
UUP (Dollar Bull) Look at your weekly charts for any close over a prior week’s high that is over 24.20. 23.90 – 24.00 should be support.
FXI (China) If it can hold over 43.40, the long-term picture is beginning to look like an accelerating breakout. Support at 43.40 and 42.75. Next resistance is 46 - 46.50
EWW (Mexico) Ugly breakdown under 56 and 50-DMA. Today’s low is at important swing low. Needs to hold to here.
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