April 21, 2016
Mish's Daily
By Mish Schneider
“This is what it sounds like, when doves cry”
Sadly, this year I have had way too much material to present to you in regards to the passing of an unusually talented icon. With Prince, who was only 57, here we are again.
The most incredible report I read about Prince suggests he has so much unreleased music, his estate could issue an album per year for a century after his death. A century! That means my grandbabies’ babies’ babies will continue to enjoy Prince’s music.
As legacies go, tomorrow or Earth Day, 150 countries from around the world will be meeting “to sign a landmark agreement aimed at slashing global greenhouse gas emissions.” Washington Post
The first 3 months of this year have been the hottest ever recorded. With real dangers from hurricanes, flooding, tornadoes, drought, etc., and the recent price action in many commodities, can the world leaders help my grandbabies’ babies’ babies live in a world where they can enjoy Prince’s music?
One of the megatrends, in fact the first one of my list, is the future of Solar, Wind and Alternative Energy. With 2 days in a row of spectacular volume in TAN-the Solar ETF, let’s take a look at the chart.
Last night I asked the question: where should speculators go next? Solar Energy, 3-D Printing, Commodities? I conclude that “we must wait to see where volume picks up. Where speculators run into as the next big thing.”
Why not Solar?
In the chart above, what you cannot see is the volume. Yesterday, April 20th, the volume posted as 506,460 shares traded versus the average daily volume of 98,000. Today, the volume surged to over 223,000 shares. Somebody(s) paying attention.
The price is currently above the 50 Daily Moving Average (blue line), in a Recovery Phase. In February, while the rest of the market bottomed, this too had an interesting 2-day pattern followed by a gap higher. Unlike the market, this has not rallied nearly as far or as fast.
The last swing high occurred on March 18th at 25.20. A move above there would certainly confirm a bottom is in place.
For now, with the meeting tomorrow, the volume indicates an accumulation ahead of that. The phase is positive albeit in its infancy stage. The upside potential is huge.
With China closing schools for pollution, the bulls best hope is a substantial investment in solar by the Chinese. I believe it’s just a matter of time.
“Dream if you can a courtyard
An ocean of violets in bloom
Animals strike curious poses
They feel the heat
The heat between me and you” Prince, When Doves Cry
S&P 500 (SPY) 206.84 point to hold. December high 211. Double top? Even more maybe today
Russell 2000 (IWM) 112.28 the 200 DMA to hold and then 111.85. Unless this breaks 107, the pullback is not too terrible
Dow (DIA) Terror at 18k has this back under that level. No real damage though yet on the charts
Nasdaq (QQQ) Inside day and held 110. Although with earnings and a drop in Google, Facebook-a move under 110 could bring this back to 107.85 the 200 DMA
Volatility Index (VIX) bullish resolve shaken some with the 3rd day of volume and a close over the last 2-days high
XLF (Financials) 23.25 the 200 DMA and now support
KRE (Regional Banks) Could not hold the 200 DMA. But does not fit the criteria for a reversal yet either
SMH (Semiconductors) 54.00 a good point to hold.
IYT (Transportation) Might have reversed after a double top. As this started the ball rolling for the rally, definitely keep your eyes here to see if the rally is over for real
IBB (Biotechnology) I say disown and he gets to a rally-Over 287.77 could see more upside. Under 272 it was a one-day wonder
XRT (Retail) 45.00 pivotal. 44.20 support. 45.70 the weekly MA to clear
IYR (Real Estate) Confirmed the reversal with the 50 DMA coming in at 74.60 as support, although wouldn’t just jump in there
ITB (US Home Construction) This could have reversed as well-need confirmation
GLD (Gold Trust) Still looking for a close over 120 to stick
SLV (Silver) 15.50 now point to hold
GDX (Gold Miners) 25-26 should be next target if holds 21.00
USO (US Oil Fund) 10.80 next point to clear on a closing basis. Inside day today (traded within the range of the day prior)
XOP (Oil and Gas Exploration) Also an inside day
TAN (Guggenheim Solar Energy) Over 25.20 looks great. 22 the major underlying support
TLT (iShares 20+ Year Treasuries) Confirmed warning phase
UUP (Dollar Bull) 24.50 pivotal
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