May 3, 2018
By Mish Schneider
Last night, we went to see the NY Mets game.
The star pitcher, DeGrom, left the game at the top of the 4th inning due to an injury.
That emboldened the Atlanta Braves, whom once DeGrom left, scored 7 runs to shut out the Mets.
The advertisement in the stadium for “select sector SPDRs” got me thinking.
Which sector SPDR is the star pitcher in the market and what happens when that SPDR becomes injured?
Currently, the Russell 2000 (IWM) leads the indices.
So, is the Russell’s or IWM the DeGrom of the market?
Yesterday, IWM tried to clear the 50 DMA to keep the distinction of the index in a bull phase.
Today, although it tried to get back above 154.17, the 50 DMA, it ultimately closed shy of it.
The other star pitcher of the market is Transportation. In fact, we can call IYT the relief pitcher.
IYT dropped early on just below the 200 DMA. As relief pitcher, IYT came back through that moving average and wound up closing only slightly lower than Wednesday’s closing price.
That prevented more runs scored by the bears.
Nevertheless, without a strong enough curve ball, the market brought in Semiconductors (SMH) to replace IYT.
With SMH closing yesterday in a distribution phase, today, as the second relief pitcher, SMH held the reversal candle low from 4/25 at 95.47 and brought the market to green.
Back now in an unconfirmed warning phase, 98.50 is the critical pivotal number for tomorrow’s game.
By the end of today’s session, SMH could not sustain the gain over the 200 DMA, even though it did close green.
That made today’s game a loser for the bulls but enticing enough to bring back the fans tomorrow.
S&P 500 (SPY) Ultimately held the 200 DMA. Though under 261 it won’t. Over 268 gets interesting.
Russell 2000 (IWM) 154.17 pivotal. Through 155.55 better. Under 154 could still see 150 next if the relief pitchers cannot pitch.
Dow (DIA) Also broke the 200 DMA but came back. 237.33 the 200 DMA
Nasdaq (QQQ) 161.50 pivotal on the 10 DMA, but needs to do more to get back over the 50 DMA or 164.15
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