The Imagination Equips Us To Perceive Reality When It Is Not Fully Materialized

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As you all well know by now, I have been super focused on interest rates. Last Thursday I wrote that a possible scenario would be to see double or triple the average daily volume on a breakout to new highs in TLTs as one way the blow off top could be in place. That happened on Friday.

Nothing I write here-let me repeat-NOTHING I write here is a signal to trade until it confirms. In other words, same is true for the possible blow off top in TLTs. It could also mean that it was a signal for a continuation to the upside.

However, if you do get a reversal from the new highs on Monday, what does a confirmation in TLTs look like? For starters, if TLTs break 111. But tops do not always happen in one day. Take the example of the blow off top massive volume day in IWM back on March 4^th. That took another 4-5 days to materialize.

And since we are on the topic of IWM (small caps aka Russell 2000), allow me to give current status. After the topping confirmation, it proceeded to fail the 50 DMA, continue its southward move, then test the 200 DMA.

Currently, IWM is holding the 200 DMA but not with any great muster, which means besides continuing to watch rates like an eagle, also keep your eyes here. Another down move beneath 110.60 should yield follow through.

S&P 500 (SPY) 2 ways to look at this-either another effort at the highs that failed or after bad news on Friday, not much of a down move from the highs. Time will tell.

Russell 2000 (IWM) 110.60 a really good place to hold or more trouble ahead. Like to see it clear 112.53 as a good sign

Dow (DIA) Pretty much same scenario as the SPY

Nasdaq (QQQ) Clearest place to watch is the 50 DMA which it has not cleared yet. Is it muscling up to take it out, or was that the test? Again, time will tell.

XLF (Financials) Holding the 50 DMA so yet another place to look-maybe we should make a list of signals to watch-from indices to sectors.

SMH (Semiconductors) In that list, this is a negative as it closed the week in a warning phase.

IYT (Transportation) 137.25 a good place to see this defend if we are listing setups

IBB (Biotechnology) 222.30 the 200 DMA here to hold

XRT (Retail) Doji day hold of the 200 DMA but under the 50 DMA-another one for the list to see which moving average it clears or breaks first

IYR (Real Estate) Looks good to 70.50 level is what I wrote last week-Friday high 70.52

XHB (Homebuilders) Cleared the 200 DMA-that is a positive

GLD Ran to the 200 DMA-will be real interesting to see what it does from here

USO (US Oil Fund) When I look at the weekly chart it looks good, provided it holds 35.98

XOP (Oil and Gas Exploration) Certainly holding near the highs