The Bullish Phases are Stolen Pictures

April 12, 2017

Mish's Daily

By Mish Schneider

We checked into a Route 66 hotel. Where art once hung, (reluctant to think an original painting), was now a pronouncement of theft.

Where investors once hung confidence, is now a pronouncement of robbery.

What has been stolen? The Bullish Phases.

What replaces those phases? Flashes of Warning.

I’m uncertain whether the hotel manager painted the sign to warn future guests from stealing anything else or if the intention is to remind staff to replace the picture.

Will pronouncing the theft of the bullish phase compel the market thieves to replace it?

Neither the Dow nor the S&P 500 held above their 50 daily moving averages. With one day left before a long holiday weekend, both are in unconfirmed warning phases.

Likewise for Semiconductors.

As for the rest of the Modern Family, the Russell 2000 is back in a warning phase. So are the sectors Biotechnology, Transportation and Regional Banks.

Retail, after a second attempt to thrust into a recovery phase, remains in a bearish one.

The yields fell further while the metals rose higher. Volatility or the fear factor subdued somewhat though VXX confirms a recovery phase.

What will compel the market thieves to replace the bullish bounty?

The answer lies with what made the market run up from the election until early March.

Hope. Hope that the administration would improve the tax code. Hope that the administration would increase infrastructure spending. Hope that the number of jobs will continue to grow. Hope that the economy will expand.

Since early March, hope has waned but not died. With the first 100 days in final countdown, the bullish phases have been reported stolen.

Perhaps the hotel management has not hung a new piece of art yet because they are weighing if it’s better to hang something more valuable or cheaper.

The market thieves could be deciding the same. Will they replace the bullish phases with even stronger upward momentum?

Or, will the market thieves replace the bullish phases with even cheaper price levels?

S&P 500 (SPY) Inside day under 234.90 the 50 DMA.

Russell 2000 (IWM) 133 important support to hold. Through 137 much better

Dow (DIA) Inside day under 206.30 the important 50 DMA.

Nasdaq (QQQ) 130-132 now a range to watch

KRE (Regional Banks) 51.50 important support. 55.20 key area to get above

SMH (Semiconductors) Unconfirmed warning phase with 77.50 pivotal

IYT (Transportation) This looks weak unless can clear 166.50 again

IBB (Biotechnology) This must clear over 295 and hold 285.