October 12, 2017
By Mish Schneider
The market seems somewhat “Groundhog’s Day”ish to me.
In my movie, I wake up each day in a town that is fraught with harrowing images only to discover it’s just a dream.
Or is it?
The landscape is filled with goblins.
President Trump’s executive order on the ACA is one.
Without politicizing, the highly speculated biotechnology sector as measured by the ETF, IBB moved lower.
This caused the doves to flock to a decreased chance of a hawkish Federal Reserve. Treasury Bonds rallied.
Meanwhile, with dreamlike ease, FANG stocks traded higher. GOOGL made a new all-time high and Amazon cleared $1000.
Yet in our macabre set, safety trades such as Utilities (XLU), Consumer Staples (XLP) and Gold (GLD) moved up in price.
Simultaneously, Semiconductors (SMH) continued its very real ascent to another new high (and then closed slightly lower).
The administration has vowed to boost coal, challenge climate-change science and bombast renewable energy.
Nonetheless, 8 of the 10 fastest growing U.S. solar markets are in states that voted for Trump.
The solar ETF TAN, gained about 1.50% today.
As the market repeatedly sidesteps and skips over ghosts, witches and ghouls, when will a new reality trip it up?
After the Russell 2000 had 2 inside days, today’s session did not give us very much clarity.
Typically, after a 2-day pause, the instrument reconciles in the direction that the 2-day range breaks up or down.
Instead, the Russell 2000 (IWM) chopped around. What could frighten this key index?
One real horror show is in brick and mortar retail (XRT).
Although the move to online shopping intensifies, one must wonder when empty malls and failing retail chains become the camel’s back-breaking straw?
Going back to Biotechnology, (IBB), if the price closes the month below 327.73 (still a way off) take heed. That would be a failure of the weekly channel line it cleared the first week of September.
Without speculators supporting IBB, consider that like active traders decaying.
Then there’s other scary images such as North Korea, Russia, the Iran deal, tax plans, natural disasters, political disharmony, that dot the spooky dreamscape.
For now, I find solace that every morning my alarm clock and a strong cup of coffee jolts me back to present reality.
The one where investors live like the Addam’s Family did. In a haunted mansion, that was their norm.
S&P 500 (SPY) Made a new high by a smidge then closed where it open.
Russell 2000 (IWM) Looks more like sideways action for now
Dow (DIA) New high and then a lower close on low volume
Nasdaq (QQQ) New high and then a lower close on low volume 146.90 support.
KRE (Regional Banks) For 57.26 to clear needs confidence-like maybe from earnings?
SMH (Semiconductors) New high close on the lows-maybe ominous-needs more confirm
IYT (Transportation) it wanted higher and it got it
IBB (Biotechnology) 337 pivotal
XRT (Retail) Failed 40.00 38 the next place to hold or if clears 41.00 phew
IYR (Real Estate) Likes a dovish Fed
XLU (Utilities) confirmed bullish phase
GLD (Gold Trust) 123.16 the 50-DMA to clear
SLV (Silver) Confirmed accumulation phase
GDX (Gold Miners) 23.30 pivotal support. Through 24 better
XME (S&P Metals and Mining) 31.60 key support
USO (US Oil Fund) 10.00 should hold if good
OIH (Oil Service Holders) 25.40 pivotal resistance
TAN (Solar Energy) 22.00 now the pivotal number to hold
TLT (iShares 20+ Year Treasuries) Perfect for our horror movie-keeps waking up from the dead. 123-126 range
UUP (Dollar Bull) 24.30 pivotal resistance and 24.00 pivotal support
FXI (China) 45.00 support point to hold
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