February 9, 2017
Mish's Daily
By Mish Schneider
The Chinese New Year of the Fire Rooster began January 28th.
Amazingly, if you apply the personality characteristics of the associated animal to how the markets have traded these last few years, the similarity between the two is uncanny.
Considering the Fire Rooster is flamboyant, optimistic and lives to remain the center of attention, today’s market action surely has lots of folks crowing.
However, one’s greatest strength is also one’s greatest weakness. The warning of a fire rooster who talks too much without providing substantive action looms as large as the one who currently attracts crowds.
Given headlines that “The Greatest Show on Earth” was in town, our Modern Family naturally gathered to watch.
How did they like the show?
Even with all the fanfare, the Russell 2000 could not trade up to the early 2017 highs nor the January 6-month calendar range high.
Grandma Retail (XRT) loves a crowd, especially if it’s gathered in front of a mall.
She came out dressed in her finest and stood right in front of the 200-day moving average. Yet, can she finally cross to the other side of that revolving door?
Then there’s Transportation (IYT). To Trans’ credit, he cleared the January calendar range high. To his doubtfulness, he has yet to revisit all-time highs.
Biotechnology (IBB) tries. But he too has revolving doors.
Regional Banks (KRE), looks more Prodigal than Big Brother Biotechnology. Back above the 50 DMA, KRE is yet another member of the family close but not quite over those key calendar ranges.
That leaves our Wonder Woman sister sibling Semiconductors (SMH). SMH took this day of festivities to rest up. Considering all the work she has done to keep the rally alive, the rest is well-deserved.
Seems that the Family enjoyed today’s show as much as I enjoyed the equally glorified as the greatest film on earth “La La Land.”
The movie did not live up to its hype. At times, I tapped my foot to the music. At other times, I scowled when the stars sang off-key.
Just like the opposing views of market participants, Keith liked it more than he thought he would. I liked it less than I thought I would. The end disappointed us both.
How will this market spectacle end?
Always our go-to, we read the Modern Family’s reviews. Do they give the rally an Oscar or a Razzie award?
S&P 500 (SPY) New all-time highs and right to the top of the channel on the monthly charts
Russell 2000 (IWM) Back to unconfirmed bullish phase. 138 key resistance, 135.50 pivotal and 133.59 key support-still
Dow (DIA) New all-time highs
Nasdaq (QQQ) New all-time highs and right to the top of a daily chart channel
KRE (Regional Banks) Unconfirmed bullish phase. 55 pivotal area at the 50 DMA
SMH (Semiconductors) 75.40 broke down so now looking at 74.50 support to hold
IYT (Transportation) Needs more and must hold 165.50 level
IBB (Biotechnology) 285 big resistance and 277 big support
XRT (Retail) If holds around 43.50, the road to January highs still appears before her super high and extremely dry. It will take more than just a show at the mall to get her up there.
GLD (Gold Trust) 117 key support. Then 116.00
SLV (Silver) 16.50 now pivotal. 17.00 the 200 DMA
GDX (Gold Miners) Closed beneath the 200 DMA-could see more correction to 24.00 area
USO (US Oil Fund) 11.60 next point to clear. 11.00 support
XLE (Sel Energy Spdr Fd) 72.00 should hold 73 should clear
TAN (Solar Energy) On radar but no decent volume
TLT (iShares 20+ Year Treasuries) 120 now key support
UUP (Dollar Bull) 25.80 support 26.20 resistance
FXI (China) Resistance up at today’s highs
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