September 15, 2016
Mish's Daily
By Mish Schneider
A little trick with backlighting, this painting on rice paper will change color and luminosity with the touch of a dimmer.
I’ve brightened it up with photo editing to make it glow blindingly (if you stare at the middle too long.)
Why? Because the market found its own backlight on Thursday. And, some invisible hand coming from somewhere adjusted the market’s luminosity to an almost equally blinding glow.
Amazingly, the market seemed to ignore the continued decline of the 20+ Year Treasury Bonds as if to say, “We get it. You might raise the interest rates. Blah, blah, blah, blah, blah.”
Furthermore, perhaps on the heels of Biotechnology’s glowing rally this week, so many other instruments lit up.
Donning her golden cap, Sister Semiconductors and her on again off again relationship with Nasdaq, led the market higher. SMH has done so since that famous runaway gap on July 18th.
Will we now look back at this recent correction as the Dow’s inevitable retest of 18,000, the terror point? Was it that Semiconductors became oversaturated with bullishness that she needed to shake out the weaker longs? How about Biotechnology’s double bottom at 240?
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Yesterday, the Russell 2000 (IWM) confirmed a warning phase, had negative floor trader’s pivots and traded below its declining slope on the 10 daily moving average.
Today, the invisible controller of the dimmer, turned up the lights and brought Gramps back above the 10 DMA and back into an unconfirmed bullish phase. (It needs a second day to confirm.)
In fact, everyone in the Modern Family blazed to varying degrees. Biotechnology, which began Monday with a bullish engulfing pattern that had not confirmed nor failed until today, finally traded above 290. Dazzling sheen!
Regional Banks (KRE) and Transportation (IYT) gained. Nowhere near as luminous as the others, they at least held critical support. Now, the invisible hand must push up even more on the toggle to keep them from dimming.
Our Grandma Retail (XRT) after trading 2 inside days right above the 200 DMA, has a wee bit more work to do to clear Monday’s iridescent candle high of 44.17. If she makes it, it’ll be mild but flavorful green chilies all around.
The level of the above painting’s glow depends upon how much light the toggler wishes to shine upon it. Which of course implies that the toggler can turn the light off at any time as well.
Run to the light, Modern Family! And please, not in the Poltergeist way.
S&P 500 (SPY) Goes ex-dividend Friday. Thru 217 better and must hold 212.
Russell 2000 (IWM) Unconfirmed bullish phase. Needs to close above 121.53 a second day.
Dow (DIA) Bye bye gremlins at 18k.
Nasdaq (QQQ) 118.12 overture or the high to clear. 116.50 now the place to hold
XLF (Financials) Closed above the 50 DMA for an unconfirmed Bullish phase
KRE (Regional Banks) Like to see this back over 42.60
SMH (Semiconductors) 65.75 now pivotal
IYT (Transportation) Reclaimed 140 now pivotal
IBB (Biotechnology) Like to see 290 hold
XRT (Retail) A good start to play catch up and needs more
GLD (Gold Trust) Holding support levels well and if can close back over 126 area looks great
SLV (Silver) Over 18.25 better
USO (US Oil Fund) Its noise and uninteresting until it clears the weekly moving average
TAN (Guggenheim Solar Energy) Inside day to yesterday’s big red bar
TLT (iShares 20+ Year Treasuries) 128-131 is the target from the channel short on the monthly chart.
UUP (Dollar Bull) 24.40-25.00 range to break
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