The Market Modern Family Needs a Lift

---

Charles M Carrillo Santa Fe Artist

San Miguel Archangel is depicted by many religions as an angel that protects folks from lethal enemies. Here in New Mexico, he can be seen driving a blue Chevy advertising his Protective Services Inc.

Although the indices did not perform too badly, today I call upon San Miguel. For many instruments other than the indices, if one checks under the hood, some protection might come in handy.

With oil and gas prices so cheap, San Miguel rides around in search of passengers looking for a lift. Today, standing on the corner of Main and Wall Street, he finds the Modern Family.

San Miguel stops the car, rolls down the window and formally introduces himself.

Now I ask you. If a guy donning a pair of white wings, driving a blue Chevy in mint condition stops and offers you protection, would you take the ride?

Without hesitation, all 6 hopped in. Needless to say, the conversation was lively.

What exactly did the Modern Family ask San Miguel to protect them from?

To continue a theme for the week, the 20+ Year Treasury Bonds (TLT) rallied over the 10 daily moving average. Considering how closely we are watching for a failure, our patience thus far has paid off.

More importantly, the implication of TLTs remaining firm is that the market is vulnerable near the all-time highs.

For those of you not familiar with the Modern Family, the Granddad of the bunch Russell 2000 could have issues. After an inside day Tuesday, IWM dropped nearly 1.00% before closing down .69%. Bearing in mind the recent move up from post Brexit, that does not sound so bad.

The Retail Sector (XRT) has room to the downside before we can exclaim “party over”. Nevertheless, she stood dutifully beside her husband on the corner. She certainly realizes she might need a jumpstart to keep her from failing the major moving averages below.

As for the rest of the family (IBB, SMH, IYT, KRE), none had a particularly good day yet none deteriorated in phases. With Sister Semiconductors leading the charge, today looks more like a shallow correction.

Best if SMH holds its 10 DMA. If not, she will be watching in the side view mirror where images may appear closer than they seem until they are not. The second of the two runaway gaps has not been filled. Bulls need to press on the gas pedal to keep their Chevy 20 car lengths away.

Did the ride with San Miguel renew the Family’s faith in the rally? Everyone must hold today’s lows. Granddad Russell 2000 has to clear above 122. If not, the risk of a reversal top is one the bulls should consider. Faith helps. But in trading, price matters more.

S&P 500 (SPY) 217.10 the 10 DMA support.

Russell 2000 (IWM) Held 121.15 the 10 DMA to the tick. Must continue to do so. And clear hold back over 122

Dow (DIA) 186.08 the 2016 high. 184.30 pivotal support

Nasdaq (QQQ) 115.90 the 10 DMA support.

XLF (Financials) January high of 24.27. 23.70 area is now pivotal support

KRE (Regional Banks) 40 key support on a weekly closing basis

SMH (Semiconductors) 63.75 the 10 DMA support

IYT (Transportation) 138.60 weekly support to hold. Back over 142 way better

IBB (Biotechnology) Broke the 10 DMA (293.30) which it hasn’t been below since end of June. Now, 285 the 200 DMA in focus. Must close over 291 to defend the weekly MA

XRT (Retail) Inside day.

IYR (Real Estate) It’s still working off a reversal pattern unless it clears recent highs

GLD (Gold Trust) Although super friendly, I find buying strength recently not the best strategy here. 128 a good level to watch

SLV (Silver) If closes this week over 19, third time a charm

GDX (Gold Miners) Testing the recent multi-year highs

USO (US Oil Fund) Landed on the 10 DMA so maybe that’s something if holds

XOP (Oil and Gas Exploration) 34.90 pivotal

TAN (Guggenheim Solar Energy) Held the 50 DMA.

UUP (Dollar Bull) FXE back in an unconfirmed Bullish Phase