June 22, 2016
Mish's Daily
By Mish Schneider
In the latest episode of Kong versus Rallysaurus, Beauty remains in Kong’s firm grip while everyone else runs from him in fear.
What does that mean for us?
If Kong is the Bear and Beauty the savior of the Rallysaurus or Bull, for now all we see is bravado with no real victor.
Honestly, whatever the Brexit outcome, at this point, it’s likely to be anti-climactic. Maybe that’s just me projecting my own weariness of having one event as the “watershed” moment for the market. Been there, done that.
Last night I wrote about trading inside or outside the bubble. Our bubble is where we ignore all external noise and pay attention only to price and chart patterns.
Today, inside the bubble I didn’t really see much price action to justify higher or lower prices from here. The major sectors closed mixed. With Semiconductors in direct contrast to Retail, there’s a chicken egg thing going on.
If Semis hold up over 55.00, giving it some room to bleed, then no harm no foul and the others should gain momentum.
If Semis (and the S&P500 interestingly) prove to have just completed a significant double top from last December’s highs, then you can blame whatever you wish for the ensuing selloff. In the bubble, we will notch it up to the persistently divided Modern Family Sectors.
Finally, if Semis clear recent highs or around 57.75, most likely its because England stuck around-or that’s what the pundits will say.
In the bubble, we will be waiting for Kong to fall from the Empire State Building, the Rallysaurus to live a few million years longer and the Modern Family to unite.
S&P 500 (SPY) Back to an unconfirmed warning phase. 208.00 is the 50 DMA and pivotal. With more weakness expect to see 202. Over 211, way better
Russell 2000 (IWM) 113 level important. Then 111 and 109. 115 pivotal. If gets over 116.50 impressive
Dow (DIA) Unconfirmed return to warning phase. Not good. 178 the 50 DMA pivotal. 175 then 172 support
Nasdaq (QQQ) Over 108.50 will prove renewed strength. Otherwise, 106.35 level has to hold up. After that, 105.58 then 102.
XLF (Financials) 22.40 support and 23.25 resistance. The range for now
KRE (Regional Banks) Interesting that this had a Golden Cross even though the price is below. If good must clear 40.10. Otherwise must hold 38.35 area then 36.00
SMH (Semiconductors) The double top area is right at today’s highs. We won’t really know if it is a real one until it fails 54.00 and then 52.00
IYT (Transportation) Pretty clear that unless this can get back over 140, looking heavy
IBB (Biotechnology) Today it prolonged the inevitable which is a $40 breakdown under 250. A miracle would be a move back over 270
XRT (Retail) If can get back over 41.75-42.00 better. 40.00 the place to hold
IYR (Real Estate) 78.25 support level
ITB (US Home Construction) Holding the 50 DMA and a good place to look if things do not fall apart
GLD (Gold Trust) 120 support-still very friendly
SLV (Silver) 15.75 support with overhead at 17.00
GDX (Gold Miners) This is not dead. See another leg up on the way
USO (US Oil Fund) Not out of the woods though until we get a weekly close over 12.15. 11.60 support with 11.40 next
UNG (US NatGas Fund) Failed to clear 8.35 the 200 DMA so down to 7.90 she goes to find if there is support
TAN (Guggenheim Solar Energy) In spite of solar city, this still has issues especially if breaks 20.00
UUP (Dollar Bull) 24.20 support
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