June 24, 2015
Mish's Daily
By Mish Schneider
Salome is often depicted as an icon of dangerous female seductiveness, notably in regard to erotic dance.
Her famous dance is called the Dance of the Seven Veils.
I write about the Modern Family comprising of 6 (IWM, XRT, IYT, SMH, KRE, IBB), and have lately added Greece through the ETF GREK as Cousin Eddie borrowing from the Griswold Family in the National Lampoon Vacation series, hence making it a total of 7!
Therefore, as we follow them through their trials and tribulations, Wednesday Salome showed up as the seductive NASDAQ, seducing the family by flirting with, but not quite taking out, the 2015 highs of 111.16.
Salome’s dance veiled the rally for all 7 of the Modern Family.
Veiled, but ended?
Not so fast. Looking back at Tuesday’s commentary and Nash’s Theory of Equilibrium, if the market is trying to predict an outcome of the current hot beds-Greece, Interest Rates, Economic Growth both in the US and globally, etc., and its impact on the market, most likely it cannot.
Why do I parallel this theory to the market? Simple-some call it a sling blade, I call it a Trading Range.
The Trading Range has prevented both the bulls and the bears from receiving a higher payoff. Of course, the bulls and the bears have their obvious preference of outcome of the market action. The point is the outcomes, while the market is in this range, are equally unknown.
Granddad Russell 2000 and Prodigal Son Regional Banks held well near the recent highs. Grandma Retail keeps hope alive above 100.00. Semiconductors and Biotechnology, although always positive when they move up as it’s a good sign of speculative activity, really just need to hold up. Both did above the 50 DMA.
Cousin Eddie (GREK) corrected yet also held the 50 DMA.
Transportation sadly, wound up like the head of John the Baptist- served to Salome on a silver platter.
Bulls hope that NASDAQ does not wind up like Salome did, voluntarily beheaded. Although QQQs outperformed the S&P 500, Russell’s and the Dow on an intraday level, until the QQQs either clear 111.16 or fail 109.00, our Family should remain in equilibrium with the weaker members battling it out with the stronger ones.
S&P 500 (SPY) Unconfirmed phase change back to warning. Again. 209.50 support, 210.85 pivotal and over 211.61 good again
Russell 2000 (IWM) How many times have I written possible reversal top only to see it hold and turn back around.
Dow (DIA) Unconfirmed warning phase unless clears back over 180.30
Nasdaq (QQQ) Until we get a decent clearance over 111.16, lots of range bound noise
XLF (Financials) 24.65 support to hold
KRE (Regional Banks) Possible top but not counting on it with the low volume
SMH (Semiconductors) Over 58.47 better but for now, we at least want to see this hold 57.10
IYT (Transportation) 148.12 recent lows
IBB (Biotechnology) Yet another low volume possible topping candle
XRT (Retail) Holding 100
IYR (Real Estate) Buckling regardless of the rates as of Wednesday action
XHB (US HomeBuilders) 36.98 is the highest weekly close since 2007- but for Wednesday overbought and possible reversal candle
GLD (Gold Trust) Typical lack of follow through type action since April
USO (US Oil Fund) Noisy until it clears 21.50 or fails 19.00
XOP (Oil and Gas Exploration) Did not confirm the reversal from the 60+ day lows
TAN (Guggenheim Solar Energy) If holds 42.00 good and over 43.50 even better
TLT (iShares 20+ Year Treasuries) 115.26 the 6/10 low and over 117.20 clears
UUP (Dollar Bull) Back up near the 50 DMA resistance after holding the 200 DMA support
GREK (Greece) If this holds now over 11.34 seems 13.00 will be the next hurdle
Every day you'll be prepared to trade with:
