June 8, 2015
Mish's Daily
By Mish Schneider
Family Feud
We have to hand it to Granddad Russell 2000 and Brother Regional Banks as patriarch and beloved son of our Modern Family. Why?
They worked like the dickens to hold up the rest of the clan in spite of the waning health of Semiconductors and Transportation.
Semis took notice. They at first broke the below the 50 DMA, registering oversold on a 2-day Relative Strength Indicator and then ultimately closed marginally beneath the 50 DMA.
Transportation broke the pivotal 152. We have watched that one as the first to decline. Biotechnology, although could not rally above the trading range from April, held up relatively well.
Grandma Retail, although traded and closed below the 50 DMA, held the fast moving average. Often we have seen her torn between spending and saving. Retail truly sits smack dab in the middle of a one month trading range!
Over the weekend I wondered whether this week will unfold comparably to the Griswold’s during their National Lampoon Vacation, arriving at Walley World only to find it closed for repairs.
Perhaps the perception of the Federal Reserve raising rates in September is to blame. Perhaps the bull market is finally waning for real.
Minimizing long exposure with specific equities makes sense right here. Even Bloomberg Business put out an article titled, “Goldman Confirms This Really Is one Boring Stock Market.” Guess they haven’t read my Year of the Sheep Theory written back in February about sheep mostly peacefully pasturing in a wide range!
I will keep watching the main members of the family (IWM, XRT, KRE) for if they give it up, then we can imagine they did indeed ditch the minivan to fly home.
Yet, however prepared I might be for the possible end of my family’s “Vacation”, I’m equally prepared to have them audition as contestants on the game show, Family Feud. To be eligible for the show you must have 5 Family Members related by blood, marriage or legal adoption.
That means we have to sacrifice one member-or one sheep-hmmm-please stand by.
S&P 500 (SPY) Confirmed warning phase with support now at 208.40 pivotal and if clears 209.50 better
Russell 2000 (IWM) Still holding up the best. 124.90 back to pivotal, under 124.25 more troublesome and over 125.45 better.
Dow (DIA) Down to test late April early May lows with 175.95 the 200 DMA
Nasdaq (QQQ) Double top looking more possible now as this enters an unconfirmed warning phase.
XLF (Financials) 24.95 the point to clear with 24.45 the 50 DMA
KRE (Regional Banks) Possible top in the works and we can definitely blame the others for it if that is the case
SMH (Semiconductors) My guess so oversold could see it hold 56 level and take another stab at 58.00
IYT (Transportation) Week is young but for now, back under that key 151.60 level on the weekly chart
IBB (Biotechnology) Has positive floor trader pivots for Tuesday so between this and semis, we could see another pop all around
XRT (Retail) United we stand but divided we fall.
GLD (Gold Trust) Confirmed reversal off the lows so could get interesting
USO (US Oil Fund) Inside day and over 20.00 better
TAN (Guggenheim Solar Energy) Hard to believe this will have much more downside, but will look at it as a buy opportunity
TLT (iShares 20+ Year Treasuries) 117.12 the 200 week moving average
EWG (Germany) If there is a country to watch-its this one so close to the 200 DMA
CORN (Corn) Back to basing
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