"Often Licked Never Beaten"

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Thanks Geoff Bysshe, for filling in so adeptly while we vacationed.

What’s crazy is that when we left on May 3^rd, the Russell 2000 closed at 111.62. Here we are on May 16^th and IWM closed at 111.03

Hence, in honor of time seemingly standing still for us, I share with you one of our travel shots of a Jamaican Ice Cream truck. Like the market, often licked, never beaten, today’s comeback had me singing the Bob Marley song, “Everything’s Gonna Be Alright.”

But wait. Before we croon “Don’t worry ‘bout a thing,” was today’s rally for real?

After all, with earnings season winding down and a FED meeting on tap, we have evidence that supports both scenarios-correction over AND more downside on tap.

Beginning with the Granddad of Indices, IWM, it retook the 50 DMA and nearly closed above the 200 DMA today. With a positive phase change unconfirmed (needs a second day to confirm), one can say the market looks “irie!”

Also notable is the S&P 500 (SPY). Although not a member of the Modern Family, SPY is a picture perfect example of how phases and confirmation of phases work. Here’s how:

On May 6^th, it tested but held the 50 DMA. Last Friday, SPY closed beneath the 50 DMA with an unconfirmed phase change to Warning. Today, SPY closed higher than where it did on May 3^rd. And, it is back in an unconfirmed Bullish Phase.

Then there’s Granny Retail. She took quite the hit last week. Yet early today, XRT made a new low from last Friday by one tick and then proceeded to rally on better than average daily volume. That puts her in contention for a reversal day if XRT can close above today’s high tomorrow.

Semiconductors also improved its phase from Distribution to Warning, clearing the 200 DMA at 52.04. Needs to confirm. Regional Banks did the same, changing to a Recovery Phase if it can hold over 38.68.

Although Transportation and Biotechnology did not improve their phases, both followed the rest of the market higher. Interestingly and where eyes need to be, IYT traded inside Friday’s trading range. Unless it clears 136.89 on a closing basis Tuesday, that could sober the bulls.

In the world of equities, while they “smiled with the risin’ sun” this morning, Bulls, I wouldn’t exactly sing the “Redemption Song” just yet.

S&P 500 (SPY) 205.50 is the 50 DMA to defend another day. Under 202.50 next. Over 210 hurdle.

Russell 2000 (IWM) 107 underlying support with 11128 the 200 then resistance at 112.50

Dow (DIA) Unconfirmed bullish phase. Needs to close over 176.42 again

Nasdaq (QQQ) In the weakest phase of the indices (Distribution). Over 107.50 helps a lot. Under 104 weak

XLF (Financials) Inside day under the 200 DMA at 23.08-point that must clear

KRE (Regional Banks) Inside day. 40.25 is the 200 DMA and must hold 38.65 area for the recovery phase confirm

SMH (Semiconductors) 54 formidable resistance but at least now back above the 200 DMA if holds 52

IYT (Transportation) Looks weak and therefore troublesome for the market

IBB (Biotechnology) Eh. Better but not feelin it

XRT (Retail) Inside day, good volume-needs more evidence

IYR (Real Estate) Doubtful it has the juice to get back to new highs. 77.25 the 50 DMA

GLD (Gold Trust) 119.50 the 50 DMA. See consolidation mainly

SLV (Silver) 15.92 big support where the gap is.

GDX (Gold Miners) 25.94 the 200 week moving average to clear now. If does, first time since 2012

USO (US Oil Fund) 11.92 the 200 DMA which it hasn’t been above since August 2014

TAN (Guggenheim Solar Energy) 20.00 is the major support area.

TLT (iShares 20+ Year Treasuries) 130 pivotal

UUP (Dollar Bull) 24.60 resistance. This had a strong reversal early May. Not so bearish anymore