February 21, 2018
By Mish Schneider
The Federal Reserve came out with the minutes of their final session with Janet Yellen.
The overall health of the economy is good. The inflation target has been met.
If you watch twitter as carefully as I do everyday, you’d think that most analysts sit under a sign like the one in the photo from a 1922 railway car-
SPITTING (ON THIS BULL MARKET) IS FORBIDDEN
Back then, signs like that served as a reminder that tuberculosis could be spread by spitting in public.
Today, both latecomers and the public that tend to buy near the highs need reminders that it’s ok to exercise caution in the market.
Maybe “spitting” on the bull market is too hyperbolic.
Yet surely, caution right now makes a lot of sense.
I repeat again, “Besides looking to see if the leaders continue to lead, watch the Russells. IWM needs to have 2 consecutive closes over 153.80.”
“Second place to look is at IYT. Should this run and clear 193.80, then consider it safe to assume that the run up is not over.”
If the Modern Family rides a train that warns them against spitting and smoking, can they still enjoy the ride?
FANG stocks were all the buzz early on.
Amazon made a new all-time high and then closed on the intraday lows.
Google confirmed the bullish phase, although it has way more to do to fill a gap above at 1169.36.
Facebook took a run for the 50 daily moving average, but could not clear it.
Netflix, came within 17 cents of it’s all-time high before retreating and closing on its intraday lows.
Meanwhile, the Fed statements juiced the interest rates. However, in the formula we seek of rising rates and a falling dollar, instead, we got both going up together.
The dollar though, has its real test at the end of February. UUP will either hold or fail 23.48 on the monthly chart, or nearly at a 7-year support line.
The last time the dollar closed a month beneath 23.48 was in 2014. Plus, UUP has not traded below 23.00 since early 2014.
As for the Modern Family, Semiconductors (SMH)-remember the bigger they are, the harder they fall?- needs to hold above the 50 DMA at 101.85.
As the only one of the Family besides Regional Banks (KRE) in a bullish phase, a further selloff will spook Biotechnology, Retail, the Russell 2000 and Transportation-all in warning phases.
Once one sick sector spits, the risk of illness to the other members increases.
S&P 500 (SPY) Confirmed warning phase. 272 now resistance. 268 is the weekly number to hold if good Subscribers: Negative Pivots in SPY DIA Positive in QQQ IWM
Russell 2000 (IWM) Under 151.50 will engender caution. Then we look at 150.
Dow (DIA) Warning phase confirmed. 247 some support and then 246.25 is the weekly MA to defend if good. 250 pivotal.
Nasdaq (QQQ) Wrote this last week, “It seems it will need a lot of buyers to push through the major resistance at 167-168. It’s major.” Today’s high was 167.72-and then it sank. 161.70 is the 50 DMA.
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