Just a Rallysaurus Monday

October 10, 2016

Mish's Daily

By Mish Schneider

With many Federal Institutions and Banks closed, our Rallysaurus began Monday gold-flecked and bare-toothed.

A beguiling sight, he was able to coax the Modern Family into that fun road trip they hoped for last week.

The path our stealth T-Rex has chosen to drive is one that will traverse some unpaved roads. The first major left turn he takes the Family on Tuesday after the close, is the one that leads to the official earnings season kick off.

If that road does not yield a flat tire, then there’s the Fed Speak Road (FOMC Minutes) on Wednesday followed by the Consumer Comfort Index Highway on Thursday.

Friday, they will continue down Consumer Sentiment Way and then make a sharp right onto Janet Yellen’s version of the Yellow Brick Road.

Moreover, on Friday should the Rallysaurus prevail in getting the Family that far, Retail Sales and our Granny XRT could very well change the course one way or another.

So as optimisitically as the market begins the week, I’m having trouble seeing its final destination.

Although I color the analysis with many metaphors, for the sake of repeating the mundane, the Dow and the S&P 500 still must clear and confirm back into bullish phases.

The Russell 2000 tried again today, yet has not successfully crossed and closed above 124.75-the area that negates its current reversal pattern.

Incredibly and on its own fumes, NASDAQ made another 16-year high with the help of the all-stars Alphabet Inc., Facebook and Amazon.

However in spite of that, Semiconductors could not sustain its new all-time high and ended the session in the red and on the intraday trading range low.

Then there’s Biotechnology’s stubbornness to get back into a bullish phase IBB enjoyed for one whole day last week. Same with Granny, although she did close marginally over 44.00.

If the Family can stay in the car and play nicely together, the Rallysaurus’ final destination should become more visible.

For now though, you might consider hesitating before hitching a ride.

S&P 500 (SPY) Same comments: Pivotal point 215 then 212 rock bottom support. Must clear 217 to keep going.

Russell 2000 (IWM) Working a reversal top unless it gets back/closes over 124.75. Went into an unconfirmed bullish phase. Now it must confirm

Dow (DIA) 184 to clear and must hold 180

Nasdaq (QQQ) 118.50 pivotal

KRE (Regional Banks) 42.50 support and 44 next point to clear

SMH (Semiconductors) A low volume potential reversal top. Must confirm

IYT (Transportation) 145 should hold if good

IBB (Biotechnology Like to see this hold 280 and clear 290

XRT (Retail) 44.50 next hurdle and 43.25 support

GLD (Gold Trust) Inside day sitting on the 200 DMA. Over 120.58 more interesting