January 19, 2018
By Mish Schneider
Frontalis Action, Orbicularis Oris Action and Zygomaticus Major Insertion sound like sex terms. They are not.
Rather, they mean raising one’s eyebrows, wrinkling foreheads, compressing and pursing lips, and retracting or elevating the corners of one’s mouth. (OK, could be cause/effect of sex too!)
All actions described make up some of our superficial head muscles.
Superficial head muscles, I am certain, were activated a lot last week in most trader’s heads.
With political footballing rampant, to be or not to be a government shutdown, was the question.
Ultimately, the decision, at time of writing, boiled down to a meeting between Chuck Schumer and Trump.
Of course, you will know the outcome by the time you read this.
Nonetheless, the market action as the week ended, not only smacked of ongoing enthusiasm, but also of insatiable buyers ready to scoop up every dip.
Checking my zygomaticus major insertion, should the corners of my mouth retract or elevate?
No doubt, after 2 inside days in two key members of the Modern Family, the Russell 2000 (IWM) and Transprotation (IYT), Friday both performed well.
The Russell’s, outperformed Transportation. Yet, IWM did not clear the high of last Tuesday’s spooky red candle or 159.41.
IYT has even more to make up in order to lose the nagging Tuesday red bar from its rear-view mirror.
Should IYT clear 206.73 (ATH), it will spark a new wave of buying euphoria.
As far as the rest of the gang, Sister Semiconductors found renewed strength. At all-time highs, SMH, like the true Wonder Woman she is, comes alive in the face of danger.
Regional Banks (KRE) expectedly, loves the idea of higher rates.
KRE approached last Tuesday’s high with aplomb on Friday.
My frontalis action though, intensified the most whilst watching our dear old Granny Retail (XRT.)
48.26 is the high from 2016. 48.38 is last week’s high. That means XRT sits at a major inflection point. If fails from here, we could see a significant double top on the weekly chart.
Should XRT roar above these levels, then highly likely we see $50-51.00 next.
Alas, certain more potentially insidious trends continue though, which make my Orbicularis Oris Insertion (lips) curl.
Both the U.S. Dollar and the 20+ Year Long Bonds have their last vestiges of support around 23.45 and 120.60 respectively.
A falling dollar and rising interest rates ultimately, could have an impact on inflation, hence, equities.
Until then, keep those superficial head muscles, especially your Lateral Rectus (eyes), opened wide.
S&P 500 (SPY) New all-time highs on the close. Who cares what the government does-we have tax reform!
Russell 2000 (IWM) 155.80-159.41 still the range to break
Dow (DIA) 26,000 in the Dow and even gremlins can’t scare it.
Nasdaq (QQQ) New all-time high close. Only a move and close under 164 could haunt the longs
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