January 27, 2015
Mish's Daily
By Mish Schneider
Coffee Talk With Linda Richman SNL Mike Myers
17 days and whaddya get? Another day older and a market verklempt! (All worked up, on the verge of a breakdown.)
Operative word here is VERGE as in that’s what the Dow in particular looked like as Tuesday’s session began-on the VERGE of a breakdown. Yet, thanks to the small caps, (IWM) our Ringo Starr of the market, the Dow held the January Calendar Range low firming from early on down nearly 400 points to closing down 290.
So how many ways can I express the trading range of 2015 and its incredible viability until the day (and it will come) that it breaks up or down? I’ve tried song parodies (Mr. Ed), comparisons to the Beatles (The Fab Four), Clichés (Glass Half Full/Empty), definitions to combat hysteria by describing the 6 month Calendar Range and its statistical significance, and last but not least, the invocation of sheep imagery, particularly their herd-like, peaceful yet reactive to danger personas.
If I’m turning now to Yiddish, it could mean the well of comparables is beginning to finally run dry!
Examining interest rates (some things never change like my hyper focus on the Russell’s, Interest Rates and Oil), 135 was the TLT (30 Year Long Bond) Calendar Range high. If you recall, Monday night I wrote that if that area cleared on an intraday basis then failed by the close, most likely it meant the rally is running out of steam. Furthermore, I pointed out the SPDR Barclays Hi Yield Bonds (JNK) closing just over its January Calendar Range high, which might suggest that the money that had poured into the US Bonds is now slowly moving into junk debt.
Looking at the indices, NASDAQ and the S&P 500 broke the 50 Daily Moving Averages and are back in unconfirmed warning phases. The Russell 2000s held the 50 DMA and closed relatively well. None, have taken out the high or low of the January Calendar range. Clearly, that calendar range roadmap has become my “Waze” or North Star if you will.
S&P 500 (SPY) Unconfirmed Warning Phase 204.77 the 50 DMA. Support 201.05, 202.75 pivotal
Russell 2000 (IWM) Bullish 117.30 the 50 DMA to defend. January high 120.56 underlying support 115.30
Dow (DIA) Warning 176.79 the 50 DMA to get back above. Support at 173.20
Nasdaq (QQQ) Unconfirmed Warning Phase 103.33 the 50 DMA to defend. Support 100.93
NOTE: Most Etfs are still in their January Calendar Range
XLF (Financials) 23.77 now resistance to clear or could see 23.15
KRE (Regional Banks) Inside day therefore indecisive
SMH (Semiconductors) Unconfirmed warning phase
IYT (Transportation) Unconfirmed warning
IBB (Biotechnology) Over its Calendar Range still
XRT (Retail) Held well
IYR (Real Estate) Over Calendar Range and on highs
ITB (US Home Construction) Inside day under the 50 DMA
GLD (Gold Trust) As expected a rally with the gap higher. Well over its Calendar Range
GDX (Gold Miners) Unconfirmed Accumulation Phase
USO (US Oil Fund) Finding stability perhaps but need more proof
OIH (Oil Services) The 3 oil related sectors are all doing better and will wait to see if they can clear the 50 DMAs
TAN (Guggenheim Solar Energy) Now will look for a dip to buy against the 50 DMA
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs closed under 135 for a second day after piercing it intraday
UUP (Dollar Bull) 24.70 will be support if good with its possible island top
EWG (Germany): Inside day-interesting if clears 28.35
FXI (China Large Cap Fund) 42.75 now support to hold
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