The Market’s Witching Hour

August 2, 2017

Mish's Daily

By Mish Schneider


blankThis Mexican wood carving represents one’s struggle between clinging onto life and staving off death.

The doctor, as life giver, places his hand on death’s head to push it away from his patient.

The patient grabs a hold of the doctor’s shoulders, affirming she wants to live.

The Market also appears “caught in a web between life and death.” Symphony X.

Two of the Modern Family members deteriorated in phases.

In contrast, the Dow Jones Industrial Average made yet another new all-time high.

The Russell 2000 (IWM) entered an unconfirmed warning phase. Yet, it clung to life holding the critical 140 level.

Transportation (IYT) spent the early part of the day at death’s door when it failed the 200 daily moving average.

However, IYT managed to affirm its commitment to life by closing back above the 200 DMA.

In the web between life and death, can even a gifted market doctor keep the rally alive?

Apple reported well. The 5% rally in that stock clearly provided medicine for the market’s survival.

Nonetheless, how much does Apple do for the U.S. economy?

The company claims it has created 80,00 jobs in the U.S. Furthermore, it says 450k jobs exist through third-party suppliers and an additional 1.53 million jobs at the “App Store Ecosystem.”

Conversely, Apple does not pay enough taxes, hence does not do enough to support the overall economy.

I pick on Apple because I believe its medicine prevented a much further decline in all four indices.

I do not believe that the company alone serves as doctor though. The impact is ephemeral.

The doctor must be highly trained. He needs IBB or Biotechnology to stay afloat and attract more speculators.

He needs Granny Retail to maintain her Recovery Phase.

He needs Regional Banks to attract borrowers.

He needs Transportation to move further away from the 200 DMA flatline.

Moreover, he needs to keep Granddad Russell’s strength up.

Otherwise, like name of Symphony X’s latest album, we could see the market enter the Underworld.

S&P 500 (SPY) 248-245.68 range to break one way or another

Russell 2000 (IWM) 142.90 big resistance now. Under 140 could see 134

Dow (DIA) Amazingly, another new all-time high

Nasdaq (QQQ) 140.80 support and must hold over 144

KRE (Regional Banks) 54.25 pivotal

SMH (Semiconductors) 88.00 resistance to clear. 85.50 the 50-DMA

IYT (Transportation) 164.25 the 200 DMA. If can clear 166.62 some relief possible

IBB (Biotechnology) 308.50 major support with 322 the place to clear

XRT (Retail) 40.40 support 41.00 pivotal

IYR (Real Estate) Like to see this hold 80.00

XLU (Utilities) 54.00 good place for this to clear and 53.00 to hold

GLD (Gold Trust) 119.00 support

SLV (Silver) 15.25 support. Over 16 looks good

GDX (Gold Miners) Inside day. Through 23.06 looks good

USO (US Oil Fund) 10.00 pivotal. 10.60 big resistance to clear

XLE (Sel Energy Spdr Fd) Like better over 67.25

TAN (Solar Energy) Struggled with SunPower down 19.32%. If can fall closer to 20.00 good buy.

TLT (iShares 20+ Year Treasuries) Below 122.80 would be indication of higher rates to come. 124 pivotal 124.80 the 50 DMA

UUP (Dollar Bull) Broke the 200-week moving average unless gets back over 24.20

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