January 7, 2016
Mish's Daily
By Mish Schneider
In 1962 Peter, Paul and Mary recorded the song “Where Have All the Flowers Gone?”
Written by the late activist Pete Seeger, he repeats the question of where have all the flowers gone, substituting flowers for young girls, husbands, soldiers and graveyards.
I woke up this morning singing, “Where Have All the Buyers Gone?” Amazing I woke up singing considering. However, the selloff feels surreal to me since I, like many I imagine, are incredulous to just how long, how deep, yet how orderly this massacre has been.
Seeger asked, “When will they ever learn?” Is this a message to any buyers still circling the pond? Admittedly, I want so badly to establish long positions in the areas I think have the greatest shots of trending up-solars, video gaming and 3D printing in particular with honorable mention to potential lows in agricultural commodities.
But have these megatrends “gone to graveyards every one?”
Looking at solars, the individual stocks look like a mixed bag from bearish to bullish phases. Canadian Solar turned bearish while First Solar is in a bullish phase. TAN, the ETF, back under the 200 week moving average, has major underlying support.
In Video Gaming, the divergence rings equally true. While YY Inc is bearish, Sohu is in Recovery.
The world of 3D printing is pretty much all beat up, but with promise. If DDD can hold over 8.45 I will watch for a phase change.
With agricultural commodities, I find watching DBA, the ETF, easiest. Perhaps a move over 20.20 will get me in long. At least, that is the closest point I see to measure for signs of health.
On twitter I posted today that anything you are watching, especially if the instrument is testing support or near major moving averages, I suggest you wait for the string of negative pivots to clear. Use a 30 minute close over the instrument’s first resistance point (R1).
At least you will have some confirmation of a scab forming with a good risk/reward from the recent lows.
When the graveyards are covered with flowers, a lyric added to the song later on, then perhaps as was Seeger’s life’s intention, harmony will be restored to the market.
S&P 500 (SPY) Oversold. Not yet to the August lows so that’s something. 200 is the main point to clear with 190 support to hold
Russell 2000 (IWM) New lows since October 2014. More importantly is the 200 week moving average at 105. Will most likely bounce from there and then break it eventually
Dow (DIA) Will this see 171 anytime soon? More likely we will see 157.50 first
Nasdaq (QQQ) Big volume with support at 104 and 109 big resistance
XLF (Financials) 22.00 is the low to hold. Had big volume so maybe getting saturated to downside.
KRE (Regional Banks) Oversold. Very. Figure support at 39 and resistance at 40 as nearest parameters
SMH (Semiconductors) Also oversold. 48.00 support and 52 overhead resistance
IYT (Transportation) Vomit bags anyone? In February 2014 the low was 125.50. It closed at 125.50 today. However, under the 200 week moving average so 127.25 big resistance
IBB (Biotechnology) Held the 23 monthly MA with a lot of the month left. 315 nearby resistance
XRT (Retail) Holding 42.00 which still means, however unlikely, that Granny could awake from the dead
IYR (Real Estate) If it holds 73.60 then could see yet another bounce to 74.55
GLD (Gold Trust) The 100 DMA is at 106.44 with major support 104
SLV (Silver) Not doing what the GLD is so most likely means gold a bit overdone now
GDX (Gold Miners) Needs to clear 15.00
USO (US Oil Fund) Big volume inverted hammer doji-could see a rally Friday
Every day you'll be prepared to trade with:
