March 31, 2018
By Mish Schneider
Fascinating what one finds out on the internet.
For example, I chose Mack the Knife as my weekend market metaphor after taking the photo of shark teeth.
Thinking the line “Oh, the shark, babe, has such teeth, dear
And it shows them pearly white,” apropos to the recent market activity, the true meaning of the song blew my mind.
The intention of my Daily’s title is to be a bit tongue-in-cheek, considering the explosive move higher last Thursday.
If you read the rest of the lyrics, the song mentions old MacHeath.
Mack the Knife originates from the Threepenny Opera, an old German piece about a pimp named MacHeath who beats his girls.
Resisting the obvious temptation to relate the song to any current events, let’s trade the pimp with the market, the girls with investors and the violence with the recent volatility.
Back to my point, this market has shark’s teeth. And last Thursday, it left no trace of red.
Both Bulls and Bears have had to tread lightly. Sharks sense movement in the water.
As one who teaches and guides hundreds of subscribers about the market and what to trade, would you like to hear what I told them last week about what to expect for this one?
Before I sum up the macro picture, a quick review on last week’s featured trade: crude oil, USO.
USO is holding the calendar range high at 12.93. Oil is in an uptrend. The technical point, 12.00 (area) should hold to keep the uptrend intact. Once USO clears 13.30, the next MAJOR resistance comes in at 15.50.
The impact on the market will be interesting for sure.
Currently, all the indices are in warning phases. The warning phases are accelerating in momentum with the declining slopes on the 10 and 50 daily moving averages.
The weekly and monthly charts are all still intact.
However, the exponential moving averages are not only sloping down, but also proving to be resistance.
That makes the advice relatively simple. Right now, consider last Thursday’s action “window dressing,” until proven otherwise.
That means that the Dow, unless it clears and closes next week over 246, is still in trouble.
That number in the S&P 500 is 268.35. In NASDAQ it’s 162.15 (exactly last Thursday’s high). And in the Russell 2000, it’s 153.02.
As far as the Modern Family, let’s make it equally simple.
Semiconductors (SMH) closed above that weekly exponential MA. An open under 103.85 may force selling. Otherwise, if holds, our strongest sib then has the 50-DMA to contend with overhead at 105.92.
As we begin April, try not to wind up a victim of Mack the Knife-unless you are daytrading, our swing traders should exercise patience.
Now on the sidewalk, huh, huh, whoo sunny morning, un huh
Lies a body just oozin' life, eek
And someone's sneakin' 'round the corner
Could that someone be Mack the Knife?
S&P 500 (SPY) The big question the market must answer is, was the multiple tests of the 200 DMA a bottom, or is the accelerating downward slope of the overhead 50 DMA going to turn out a major sell signal?
Russell 2000 (IWM) As this only tested the 200DMA once in February, now the 153 resistance, if it cannot get through, could take this down to a second test at 149 area.
Dow (DIA) 245.70 resistance and 234 the 200 DMA
Nasdaq (QQQ) Similar to IWM the 200 DMA is far. However, the 163 resistance, cleared or not, will be telling
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