Prodigal Son in Hot Water!

September 7, 2017

Mish's Daily

By Keith Schneider

blankOur Modern family’s, Grandma, Retail (XRT) reclaimed the 50-DMA yesterday and gained today as well confirming a recovery phase.  This was a welcome change and many beat up stocks in the sector gained. Meanwhile, Grandpa (IWM) who has not been feeling right for months lagged with the prodigal son (KRE) regional banks, tanking -2.65% along with lower yields. The discontent within the family remains highlighted by the fact that Uncle Utilities has been performing better than the SPY for over a month.

Growth stocks continued to outperform value with NASDQ 100 (QQQ) leading. Grandma retail was the second biggest percent gainer in our sector summary table today. If you’d like to learn more about the Grandma and the modern family click here.

If you have access to MarketGauge’s Triple Play indicators you should take a look at the strength in the price leadership line.

The biggest mover was Gold miners and metals in general which is not surprising considering the drop-in rates as Bonds yields reached the lowest levels today since last November.

Expect to hear more about both sectors here in the coming days and weeks.

I may have saved the best for last today….

If you attended our free training last week on explosive trade set ups that often hit their targets in the first day then you should be enthusiastically looking forward to tomorrow, because…

In short, today’s market action in the SPY was once again completely inside of yesterday’s trading range. This is now two consecutives inside days and this consolidation often leads to large trend days. The compression in IBB at new highs is also worth watching especially if the SPY breaks out to the upside of the inside day pattern.

If you missed the training that covers how to trade inside days, I’ve reopened access to it for tonight and tomorrow here.

S&P 500 (SPY) Yet another Inside day. Look for support at 245.75. Resistance at 247.30 and then needs to close well over 248 to get going, and watch the all-time high of 248.91.

Russell 2000 (IWM) Still in Warning Phase. 138.45 is important support to hold and then 137.25 and 136.25. Resistance at now at 140.70 and then 142.30.

Dow (DIA)Closed under 10 MA for last three days with support at 216.60. Resistance at 219.50 and then 220.

Nasdaq (QQQ) two doji days. Look for support around 143.60 and 142.40 Resistance is at 146 and then the highs at 146.60.

KRE (Regional Banks) major breakdown with follow-thru today after closing under 51. Negative until closes over 52. No support until 46.50

SMH (Semiconductors). Strong close above the 10-DMA. Look for support at 87 and breakout above 88.90 for possible assault of new all-time highs

IYT (Transportation) Consolidating between the 200 and 50-DMAs Look for support at 166.40 and resistance at 170.

IBB (Biotechnology) Very Strong sector with nice compression at highs Breakout above 336.80. Support around 330-328.80

XRT (Retail) Much awaited breakout over the 50-DMA with confirmed recovery phase Let’s see if it holds 39.25. Resistance around 40.75

IYR (Real Estate) Needs to clear 82 for clear sailing and hold 80.60

XLU (Utilities) Nice close over 10-day MA. Support at 54.40 and 53.60. Strong sector that is outperforming SPY.

GLD (Gold Trust) Breakaway market.  Support at 126 and 125 and resistance at 131

GDX (Gold Miners) Now one of the strongest groups and plenty more upside. Look for support at 24.45. Expect a little resistance at 25.60 and then more at 28.25

SLV (Silver) All metals on move with yields dropping. Look for support at 16.80 then 16.30-.20. Big resistance at 17.50.

USO (US Oil Fund) Inside day and still following the pattern of a major bottom. Look for support at 9.90 and then 9.67, and must hold 9.30. Big resistance at 10.25.

UNG (Natural Gas) Be patient Still   Here’s what has been written here for weeks… “Still in a bear trend according to phases. If it has a 30-min Opening Range breakout over 6.75 -6.90 it could indicate a longer-term bottom. The all-time low is 5.78, the weekly base high is 9.80. So the risk is just over a $1 and the first target is just over $2, but if it breaks $10 then $12 is the next stop.”

KOL (Coal) Consolidation day above 10-DMA and multi- year highs Look for support at 14.90-.80 and breakout above 15.45

TAN (Solar Energy) Consolidation day under 22.00 resistance and 21.00 support. That’s all you should focus on.

TLT (iShares 20+ Year Treasuries) New highs yet again after weak jobs number and Trumps deal with Democrats.  Friday’s low (127.69) is pivotal for short term and 126.40 would trap fresh bulls. Gap fills at 129.60 from last November.

UUP (Dollar Bull) Look at your weekly charts for any close over a prior week’s high that is over 24.35 for possible bigger correction but bigger picture is that dollar has topped. Important support at 23

FXI (China) If it can hold over 43.40, the long-term picture is beginning to look like an accelerating breakout. Support at 43.40 and 42.75. Next resistance is 46 - 46.50

EWW (Mexico) Held swing low from mid- August and closed above 50 days and back into unconfirmed bull phase. 55.40 support

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