November 7, 2016
By Mish Schneider
All you Wranglers, did you have your lassos tied to your belt ready to rope in Monday’s massive rally?
Over the weekend we asked for a Market Whisperer. We asked if the market would allow investors to saddle up.
After finding a modicum of trust last Friday, the horse (market) and rider (investors) did indeed go for a gallop. Led by impressive strength in the Transportation sector, the rest of the Modern Family got out their riding boots, spurs and crops.
Some of the Family rode out to join Trannies as the backup posse. Others bridled their horses, but stayed in the barn.
The Dow soared past 18k after realizing the Gremlin he thought he saw was merely a figment of his imagination. Presently, the Dow has ponied up into an unconfirmed bullish phase.
With one day left before the election, will the rest of the investor riders consider entry into the Rodeo?
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The Russell 2000’s high tick from last week was 118.70. Today’s high print 118.82. It closed at 118.52. That will make post-election prices a bit clearer.
Monday, Granddad took his horse out in the ring. If Gramps does enter the Rodeo, he will go for barrel racing. His horse will need athletic ability. And Gramps IWM must find the skills to successfully maneuver the horse around obstacles.
Grandma Retail stayed in the barn, although she donned her cute pink lasso and white chaps. However, getting her on a horse will require a much bigger move than the one today.
For now, Granny has chosen mutton busting as her rodeo event. Typically reserved for kids, Granny will ride a sheep and try to hold on for more than 8 seconds.
Transportation trains for bull riding, the big event. IYT must not get bucked off the bull and stay atop long enough to qualify.
As far as the rest of the Family, Regional Banks likes calf roping. Currently, KRE is on the horse. But dismounting and tying the calf’s legs in record time will mostly likely come down to the December Fed policy.
Sister Semiconductors doesn’t do Rodeos. She prefers the tech mechanical bull.
Biotechnology is the Rodeo clown. The comic relief IBB can provide will begin by holding Monday’s lows.
Whether the other investors and market instruments participate or not remains to be seen. One thing we can all agree on-this is NOT our first Rodeo!
S&P 500 (SPY): If volume is any indicator, today's was light. Lots of overhead resistance. Support now 210 with 212 pivotal
Russell 2000 (IWM) 117.70 some support then 117. Could see move to 120.50 next
Dow (DIA) The best performer as it touched and closed right at the 50 DMA. Over 182.30-182.50 encouraging for follow through
Nasdaq (QQQ) 115 pivotal 116.50 resistance
KRE (Regional Banks) 43.50 support. It closed over 44.20 so looks good
SMH (Semiconductors) Back to unconfirmed bullish phase if holds and closes over 67.38 a second day.
IYT (Transportation) 146 now pivotal. 150-151 last December highs to clear
IBB (Biotechnology) If investors wake up we will see it here. 256 support and 272 big overhead resistance
XRT (Retail) 42.00-42.25 resistance that must clear for starters. And, it must hold around 41.40
IYR (Real Estate) The makings of a possible reversal pattern
GLD (Gold Trust) 121.75 the 200 DMA held. That means it is ready to rally again just in case against a major MA
SLV (Silver) 17.00 support to hold
GDX (Gold Miners) This did not close over the 200 DMA. That makes 24.22 pivotal for tomorrow
USO (US Oil Fund) Looks a lot better today. 9.82 is the nearest risk point
TLT (iShares 20+ Year Treasuries) Support at 130. The Weekly MA 131.90.
UUP (Dollar Bull) 25.34 Resistance 25.20 closest support
EEM (Emerging Markets) Back to unconfirmed bullish phase
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