The Bird of Hermes Is My Name, Eating My Wings To Make Me Tame

March 26, 2015

Mish's Daily

By Mish Schneider

Kohta Hirano Japanese Manga Artist

Do we regard the 3 day sell-off beginning Monday in the S&P 500 as short-lived considering the marginal 4th day red close on Thursday?

Trading conditions were choppy to say the least as the 4 indices split in terms of which ones are defending the 6 month January Calendar Range high and which ones are beneath. Both NASDAQ and the Russell 2000s are holding above while the S&P 500 and the Dow have failed it.

Current market conditions are harder to read than usual. After all, Biotechnology, Retail, Regional Banks (3 of my modern family) remain in bullish phases while Semiconductors confirmed a warning phase. The one I thought might retreat has done so with conviction as Transportation traded below then above the 200 DMA after a gap lower, after the gap lower. In other words, although now oversold, our Transgender sibling never made it to the January 6 month highs and now sits just slightly above January 6 month lows.

So where do you look? The US Dollar and Interest Rates firmed. Soft Commodities weakened and gold and oil firmed -Yemen news had a lot to do with it-but I would argue the blow off bottom, reversal candle off the lows (noted here last week) came first.

As Friday rolls around, I am looking at the areas that outperformed. Cyber Security (HACK), Regional Banks (KRE) are the top two sectors. Everyone else, (besides oil, energy and the metals) is sitting back with the herd, hungry but hesitant to eat.

S&P 500 (SPY) confirmed warning phase. Let’s call 204-208 the new range

Russell 2000 (IWM) 122 held and will like better over 123 otherwise could see 120.84

Dow (DIA) 173 support and 177.50 resistance

Nasdaq (QQQ) Unconfirmed warning phase. 104 support and 105.50 point to clear

XLF (Financials) 23.75 support and back over 24.10 much better

KRE (Regional Banks) Outperformed and held the bullish phase-40.00 support to hold

SMH (Semiconductors) Unless it gets back over 55, could see 52.25 next

IYT (Transportation) Oversold now

IBB (Biotechnology) Tested and held the 50 DMA

XRT (Retail) 100 is key to clear or could see move down to the 50 DMA

IYR (Real Estate) 78.50 support

ITB (US Home Construction) look here over 27.50