October 14, 2016
By Mish Schneider
The 2001 film named after the 1938 song of the same name, follows two siblings who become targets of a demonic creature.
Our market Modern Family (IWM, XRT, IBB, KRE, IYT, SMH) has also found itself the target of a (maybe “demonic” a bit hyperbolic) creature.
Last week, the entire Modern Family embarked on a road trip in a car driven by the Rallysaurus. They began the journey on Monday. Tuesday, the car got a flat. While they changed to the spare tire, the car radio tuner got stuck playing an ominous fugue.
On Wednesday they got back on the road and had a fender bender. Thursday, their engine overheated.
By the time Friday rolled around, the Family, fatigued but not all together daunted, ran into an old rusty truck. The driver of that truck turned out to be the “Creeper.” That Creeper periodically surfaces to feast on unsuspecting victims.
In the film, the Creeper tastes both siblings and decides to eat and remove the eyes of only one of them.
Which one (or more) of our siblings has the Creeper chosen? Can (or will) any of the other family members come to the rescue in time?
Last week we looked for evidence to predict the outcome on how this road trip might end-happily or fatally? (again, hyperbolic)
The Dow, one major factor, did indeed hold above 180 or 18,000 in the Dow, it’s own terror level. That helps.
The Russell 2000, on the other hand, could not close out the week over 122. We are now looking at the very real possiblity of a move down to 113-114 or where the 200 DMA sits.
In an expected twist to the plot, Granny Retail (XRT) and not a sibling got cast as one of the two potential victims. Our poor Big Brother Biotechnolgy also got cast and seems more likely than Granny does to lose his eyes.
Although IBB did not close out last week below 264, the 200 week moving average, the action did not prove promising for its survival this week.
The best chance for IBB and XRT’s rescue comes from two other siblings, Sister Semiconductors and Sister/Brother Transportation.
Both IYT and SMH are in bullish phases-a stark difference to IBB and XRT’s distribution phases.
Another sib that closed just below the 50 DMA but close to a bullish phase, Regional Banks, must pitch in too.
Watch for all three to begin this week holding above their 50 daily moving averages. If they do and regain momentum, that should force the Creeper back into hibernation. Hence, XRT and IBB will be saved.
If, though, SMH, IYT and KRE cannot muster the energy to hold up, I suspect we will not only see Jeepers Creepers, but also the sequel “Jeepers Creepers 2”.
S&P 500 (SPY): Did not confirm a reversal bottom. Under 212 caution. Over 214.65 better.
Russell 2000 (IWM) 120 pivotal with 122 good place to clear/close above
Dow (DIA) T-E-R-R-O-R if breaks and closes under 180
Nasdaq (QQQ) Could not clear 117.35 the 50 DMA. Back in an unconfirmed warning phase.
KRE (Regional Banks) Confirmed phase change to warning but closed right on 42.00, the pivotal area.
SMH (Semiconductors) Held the 50 DMA which is the best sign of all if continues to do so.
IYT (Transportation) Held the 50 DMA which is lower at 142.65-another good sign for the bulls if continues to hold
IBB (Biotechnology) 264 key weekly moving average
XRT (Retail) Inside day under the 200 DMA. Worse yet, 43.02 the 200 week moving average.
IYR (Real Estate) Held the 77.30 pivotal area for a weekly close but not that impressive yet
GLD (Gold Trust) Seems 117.50 in the cards
GDX (Gold Miners) 21.80 the 50 week moving average support
USO (US Oil Fund) 11.35 pivotal point on closing basis held. Must now clear the recent highs to continue
TAN (Guggenheim Solar Energy) 20.00 pivotal-over 21 better
TLT (iShares 20+ Year Treasuries) Yields have risen a lot. Helps smooth a possible rate hike-support now at 131.00
UUP (Dollar Bull) Strong like dollar bull.
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