Stock Market Burlesque

September 25, 2019

Mish's Daily

By Mish Schneider

blankAccording to Wikipedia, a burlesque is a literary, dramatic or musical work intended to cause laughter by caricaturing the manner or spirit of serious works.

The dictionary says that burlesque seeks to ridicule by means of grotesque exaggeration.

In the market, yesterday’s price action sought to ridicule bullish investors by means of a grotesque exaggeration of a sell off.

However, I do not believe too many bulls found laughter in that.

Until today.

Anyone who hung onto their long positions, found yesterday’s market caricature way more amusing today.

This year has been boa feathered with lots of grotesque exaggeration.

The constant headlines can leave investors either feeling sexy or awkwardly exposed.

So now that we bumped and grinded our way out of disaster, what’s next?

Incidentally, I shot this photo at a recent burlesque show in Santa Fe. The whole notion of burlesque continues to have quite a cult following.


Ideally, you want to see the entire economic Modern Family trending in the same direction.

The Russell 2000 IWM, fell right to the 50-DMA (blue) and rallied from there. The slope on the 50-DMA is negative making the current bull phase weak.

Regional Banks KRE are in an Accumulation phase.

Transportation IYT, like IWM, is holding in a weak bullish phase.

Retail XRT is in a Recuperation phase, which is also weak if one considers the negative slope on the underlying 50-DMA.

Biotechnology IBB is in a bearish phase and closed red.

Finally, Semiconductors SMH is in a stronger bullish phase as the slope on the 50-DMA remains positive.

Pull that all together, and we continue to see disparity among the key components.

Now, it is possible that IWM, KRE, IYT and SMH are all forming inverted head and shoulder formations. That could be very bullish.

Nevertheless, that does not mean very much at this stage with only SMH convincingly strong.

Furthermore, with IBB and XRT under pressure, while IWM and IYT are in weaker bull phases, one good bump and grind, and the market could need hip replacements.

Hence, my viewpoint on the market remains the same.

We tested resistance and failed. We tested support and held.

That’s called a trading range.

Or in burlesque terms, the tease for both bulls and bears.

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S&P 500 (SPY) Popped off the 50-DMA. Yet, still has to clear 300 to get more convincing.

Russell 2000 (IWM) Inside day. 152.12 the 50-DMA held. 156 is the major overhead to clear to get more interesting

Dow (DIA) Inside day. 266-270.70 range to break

Nasdaq (QQQ) 189.20 or the 50-DMA pivotal now.

KRE (Regional Banks) Since 52.23 is the wall of support, a move over 54 can be a trigger for a long-however, can it clear 55?

SMH (Semiconductors) 116.21 the 50-DMA held. However, this too must get through the resistance at 121.

IYT (Transportation) 186.21 the 50-DMA pivotal. Inside day here as well. All the inside days spell indecision. Makes sense

IBB (Biotechnology) 102.57 the 200-WMA failed.

XRT (Retail) Inside day. 43 to clear for starters and 41.15 to hold

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