September 10, 2015
Mish's Daily
By Mish Schneider
“The Loooooove Boat”
Theme Song from the TV show that ran from 1977 to 1987
Like the TV show, which promised and delivered something for everyone, so does our current market with consistent trading setups for both the bulls and the bears.
How Is the Market Like The Love Boat?
The Love Boat was considered a “monumental exercise in controlled chaos.” Likewise, the market, which still may wind up as a protracted bear market in the near future, for now, is holding up making it too, a monumental exercise in controlled chaos.
The Love Boat had 3 story lines: the “heart” story, the “tears” story, and the “laughs” story, and right now the market does too.
The Market’s 3 Story Lines:
The Heart: Looking at the Modern Family that would be Biotechnology (Big Bro), Regional Banks (Prodigal Son) and maybe Semiconductors (Male sibling).
IBB and KRE are best as IBB is above the 200 DMA currently and KRE is trying to confirm back above its 200 DMA. SMH, more of a wildcard, should the market hold, looks like a rally above its 50 DMA is possible.
The Tears: Gotta go with Granny Retail. XRT struggles to keep up right now. The best hope for a relief, a move and close over 93.60-94.00 level, which must happen soon!
Although, not part of the Modern Family but certainly a dreaded gremlin of theirs, I have to go with the Federal Reserve as the penultimate sob story.
Bloomberg Business confirms what I have been writing about for some time now-to hike or not to hike rates-a really tough call.
Imagine Janet and her team weighing that decision on the volatile markets, uncertainties about international growth against the US Expansion, FED credibility as they promised to hike in 2015 plus, a rising threat of deflationary contractions. Our dear Ms. Yellen could be crying her eyes out right about now.
The Laughs: Because it’s so serious, I put the Federal Reserve here as well.Let’s put it this way, if I had the world’s markets resting on my shoulders, I would be crying, and then drinking heavily until I found the whole ordeal strangely humorous. I envision during those quiet moments alone Janet asks herself, “How did I get here?”
The Love Boat took place aboard a giant cruise ship. It was a show for people who couldn’t afford to go on a cruise. Every week they felt they were going somewhere exotic by watching that show.
The Market-Our Virtual Cruise!
S&P 500 (SPY) Range still the same-200 will be the next big resistance to clear with near-term support at 195, then 190
Russell 2000 (IWM) Watch 114 carefully, especially on a weekly closing basis
Dow (DIA) 159.74 last week’s low is best area of underlying support. 166.75 level the point to clear
Nasdaq (QQQ) 98.90-99.00 for now, looks inevitable unless this clears the 200 DMA at 106.91
Volatility Index (VIX) Over 28.30 bad sign for market
XLF (Financials) Looks heavy or at least let’s see if can hold 22.00 now and clear 23.20
KRE (Regional Banks) Closed over 41.35 the 200 DMA and now needs a second day to confirm the improved phase change
SMH (Semiconductors) 50.00 pivotal, if the market holds, 51.22 is the 50 DMA to clear
IYT (Transportation) 146 huge pivotal area with 141 next level of support
IBB (Biotechnology) In best shape, like to see a second close over the 200 DMA after this one to confirm phase change
XRT (Retail) Support 90.75 unless it resurrects over 93.60
IYR (Real Estate) If bottom picking, this has support at the 200 weekly moving average or 68.36 and would buy over Thursday’s high if gets there
GLD (Gold Trust) 108 the 50 DMA resistance and 105 support
SLV (Silver) Probably waiting for the next FED decision
GDX (Gold Miners) Hard to believe, but looks heavy still (again)
USO (US Oil Fund) Looks like it could be forming and will wait for it to clear/confirm over the 50 DMA
TAN (Guggenheim Solar Energy) Over 30.93 clears the 200 weekly moving average. 29.50 near-term support
TLT (iShares 20+ Year Treasuries) Inside day and back to an unconfirmed warning phase.
UUP (Dollar Bull) Broke the 200 DMA which means needs a second day to confirm the deteriorating phase change
GREK (Greece) Unconfirmed phase change to recovery (over the 50 DMA)
EWP (Spain) Just noticed the confirmed island bottom
FXI (China Large Cap Fund) Managed to close well relative to the SPY but couldn’t get close to 38-39.00 for best short trade risk
DBC (DB Commodity Index) Looks similar to USO chart
SGG (Sugar) Confirmed recovery phase and more importantly so did cash which is the 1st time since May
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