Let's Go On a Bear Hunt

May 26, 2016

Mish's Daily

By Mish Schneider

mdaily20160526

We see our Grizzly is back in the water looking rather submissive. Almost cuddly, right?

As the week draws to a close and the long weekend is nearly upon us, our bear should remain water bound as so many bulls now roam the landscape.

However, two of our telltale signs, the Retail and Transportation Sectors, both components of the Economic Modern Family, are where our bears have eyes.

Transportation, sitting just under the 200 daily moving average, could not confirm the improved phase change from Distribution to Warning. With increasing bullish sentiment in the overall market, Trannies are the reason our Bear wades in water, yet wears that hopeful look on his face.

Retail has to close out this week over the 50 week moving average. Thus far, that makes 41.75 in XRT a factor. It closed just there today.

Right now, momentum favors the Bulls. The Grand Poppa or the Russell 2000 entered into a Bullish Phase.

For Granddad, this is the first time since August 2015 the 50 DMA sits above the 200 DMA. Typical of pre-holiday action, IWM closed with a Doji. That means the opening and closing price of Thursday’s session were practically the same. The inference is indecision or a pause.

If one looks at the last swing high in IWM at 115.05 made on April 27^th, one can deem the indecision/pause as appropriate. Resistance is a short hop away while support is considerably lower. That makes for a wonky risk/reward to any new buyers until that resistance clears.

Meanwhile, Does a Bear S*^t in Commodities Woods?

While Agricultural Commodities remain poised, the oil digested recent gains. Gold bears spied the riverbed. However, I say not so fast Mr. Grizzly. With gold fairly oversold and volume scant, it won’t take much to see a gold rally tomorrow.

If today’s action is any indication, I suspect Friday’s to consist of low volume chop ahead of Memorial Day. Therefore, have fun and prepare for those family barbecues this weekend. And just in case, keep bear spray close at hand.

S&P 500 (SPY) April high 210.92. Held 208.50. Inside day

Russell 2000 (IWM) 113.07 the weekly moving average this must close out the week over. Then, 115.05 resistance. Support at 111.

Dow (DIA) Confirmed Bullish Phase. Inside day with support at 177

Nasdaq (QQQ) 108 pivotal. Above 109.72 a gap to fill overhead

XLF (Financials) 23.35 weekly chart support.

KRE (Regional Banks) Inside day. Dip buyer as long as it holds 40.85

SMH (Semiconductors) 56.00 pivotal. Then the December high 56.99

IYT (Transportation) Unconfirmed phase change to distribution. Want to see this hold over 137 and clear the 200 DMA once and for all

IBB (Biotechnology) 272 support then 268. Through 275 could see 290

XRT (Retail) Needs a weekly close over 41.75

GLD (Gold Trust) Needs to get back above 118. And hold 115.85 area

SLV (Silver) Like better back over 15.65