October 19, 2017
By Mish Schneider
It’s always so beautiful in the Southwest just before the sun goes down.
Afterwards, without the light of the moon, it gets dark.
The temperature, at 7000 feet above sea level and with no buildings around to absorb heat, drops quickly.
The market began the day holding its breath, wondering if the beauty of the new highs (and high altitude) we saw yesterday, would crash on the 30-year anniversary.
The Dow dominated headlines.
The market opened lower, giving bears hope for their day of reckoning.
Some folks are night owls, or predators, waiting to swoop down on the weak longs during the cold, dark October nights.
However, unlike the vast land in New Mexico, the market has many warm bodies around.
They came in to buy hence, preventing a precipitous drop in the temperature or the market price levels after its sun went down.
Instead, the Dow rose like a full harvest moon and kept the market alit.
As well prepared as many bulls are to buy the dip, why do the smart ones have extra layers (or protective stops) on just in case it gets real chilly?
When the market reaches potential inflection points, we find comfort in evaluating the Modern Family’s performance.
Beginning with our Granddad Russell 2000 (IWM), I’ve been looking at the 149 level as pivotal. For now, with the close back above it, I see no topping pattern.
Granny Retail (XRT) has a pivotal level of 40.00. Even in its current bearish phase, the longer it holds above that level, the better.
That’s not exactly a reason to celebrate though. If 40 and then 38 breaks down, even a witch’s coven dancing around the harvest moon won’t help.
Transportation (IYT) did a clutch save, holding its key pivotal level at 176.
Regional Banks (KRE), trades within a range as if to say-the Prodigal Son is ready to ask for forgiveness, yet at the same time, will have no trouble becoming lavish should it clear 57.00
Sister Semiconductors (SMH), continues to look like the Wonder Woman she is. Although SMH closed slightly red, the rally from the lows proves that buyers sit around and wait to buy every dip.
Finally, Big Brother Biotechnology (IBB), a political football, has until October 31st before we know whether it will hold the critical 327 level or not.
A glorious sunset is the epitome of fleeting beauty.
Should the Dow’s moon wane, like what the smart money does, make sure you have those extra layers on hand just in case the rally is equally fleeting.
Please join me after the sun goes down at 8:30 EST for a free webinar-How to Catch Big Swing Trades Using Market Phases In any Market Condition WITHOUT Time Consuming Analysis
S&P 500 (SPY) 254 support and still looking for that blow-off rally
Russell 2000 (IWM) 149 cleared and now over 150 we will see what Gramps is made of.
Dow (DIA) Wash, rinse, repeat-New highs AGAIN
Nasdaq (QQQ) 147 support. 149 pivotal resistance
KRE (Regional Banks) 57.00 resistance that must clear
SMH (Semiconductors) brief rest then time to rally.
IYT (Transportation) Good recovery after looking vulnerable 176 support 178.50 resistance
IBB (Biotechnology) It’s all about 327 support or a return over 340
XRT (Retail) 40.00 pivotal today held but this went into an unconfirmed bearish phase
XLU (Utilities) Safety players out again-back to an unconfirmed bullish phase
GLD (Gold Trust) Not much to trade so aside
SLV (Silver) Waiting to see if 16 holds and 16.50 clears
GDX (Gold Miners) 23.67 the overhead 50-DMA. 23.00 support
XME (S&P Metals and Mining) A close over 33.20 better
USO (US Oil Fund) A close over 10.45 better.
TAN (Solar Energy) 22.00 now the pivotal number to hold
TLT (iShares 20+ Year Treasuries) 123-126.09 range
UUP (Dollar Bull) 24.30 pivotal and 24.00 pivotal support
FXI (China) 46 broke so now, we look at 45 to hold
Every day you'll be prepared to trade with: