September 13, 2018
By Mish Schneider
Coming into today, Semiconductors (SMH) entered an unconfirmed distribution phase.
Early on, SMH went into a bullish phase.
Yet it could not hold above the 50 DMA, so it wound up closing green but in an unconfirmed warning phase (above the 200 but below the 50 DMA).
Meanwhile, the S&P 500, cleared the overhead fast MA along with NASDAQ.
The Russell 2000 (IWM) did not, nor could it sustain a rally.
The Transportation Sector (IYT), having led this most recent rally, made new all-time highs early in the day.
However, IYT closed near the intraday lows for a potential topping pattern.
Furthermore, the dollar declined while the rates remained unchanged.
Did that help sustain the rally in metals?
Yet, the emerging markets gained.
So, since we never know which way the whang-doodle will throw the ball lately, what’s next?
For equities, we like to keep our eyes on Transportation.
We thought it a bit strange that IWM did not follow IYT into new high territory.
Now, Hurricane Florence, which disrupts travel schedules, could have something to do with IYT’s decline.
What we want to look for now, is for IYT to hold above the fast moving average, (the one that IWM has not cleared) and then bounce.
Otherwise, with today’ larger than average volume on the sell-side of IYT, we once again become really cautious.
As far as SMH, we are still looking for this to hold above the 50 week moving average or 103.82.
If holds, better. If not, and considering the move in IYT, caution will turn to tightening up stops and looking for shorts.
Speculators came sheepishly back into Biotechnology (IBB). That ETF entered an unconfirmed bullish phase.
I do not consider IBB a leader, but as a member of the Modern Family, I do take note that the confidence in the market is still there. For whatever that is worth.
As far as the dollar, if we look at UUP, the low on 8/28 was 25.01. Should that break, our attention on metals and some of the emerging markets will become more focused.
In the meantime, our market whang-doodle could flip this all around tomorrow. That’s how it goes these days.
S&P 500 (SPY) 289.50 now the closest support. The high 2 weeks ago was 291.74.
Russell 2000 (IWM) 170 big support to hold on a closing basis. Now, if it has anything, it must clear/close over 172.
Dow (DIA) 259-260 support to hold.
Nasdaq (QQQ) 184.00 is that fast moving average it must hold to keep going.
KRE (Regional Banks) Unconfirmed distribution phase under the 200 DMA at 62.08
SMH (Semiconductors) Unconfirmed warning phase. 103.82 the big swing area for the end of this week with the overhead 50 DMA at 106.32
IYT (Transportation) 206.90 the old high pivotal support. It closed below it. 205.60 the fast MA to hold. Back above 206.90 we are looking at big resistance at 208
IBB (Biotechnology) Unconfirmed bullish phase with a confirm if this closes over 117.75
XRT (Retail) Broke the fast MA which makes 51.80 a good spot for this to recapture. The 50 DMA below is at 50.70
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