May 24, 2016
Mish's Daily
By Mish Schneider
After writing about the possibility of the Grizzly bear’s removal from the endangered list, today we see our bear purifying himself in the water (Baptism?).
His paws are in prayer position. He prays not only for himself. He prays for the Hunter Bulls who declared victory keeping our bear temporarily confined.
Three of the four major indices had unconfirmed phase changes. NASDAQ, which needed to clear 108, complied entering an unconfirmed Bullish Phase.
The Russell 2000 (Granddad) led the way early on entering an unconfirmed Accumulation Phase. The S&P 500 handily cleared the 50 DMA to move into an unconfirmed Bullish Phase.
Our Phase change holdout is the Dow. 177 is the 50 DMA and point to clear before it joins its brethren. 30 Blue Chip stocks. Who cares right? Well, not so fast. Not a member of the Modern Family, the Dow nonetheless could turn out the catalyst for phase confirmation in the other three or not.
Equally significant to the whole picture--or in the case of our Grizzly, the whole forest-- is how Retail and Transportation react to today’s rally in the very near future.
Although the Financial Sectors, Regional Banks (KRE) and XLF left the 200 DMAs in the rearview mirror, Transportation (IYT) had an another day of a teeny range with lackluster action. IYT could not clear the 200 DMA at 138.95.
Retail (XRT) tagged along for the ride. Extremely far from either the 50 or the 200 DMAs, our watch for Granny is the 50 week moving average. 41.75 is for now, resistance.
Look at Semiconductors though. 56.00 with its culpable resistance seems only a short rally away. Biotechnology (IBB) also cleared into an unconfirmed phase change to Recovery. Yep, a second day to confirm required there as well.
Bulls laughed in the face of gold, silver and the gold miners. Having seen the bear wading in the water thereby thinking he’s no real threat to them, the bulls must not forget a bear can run up to 40mph if need be.
In honor of Bob Dylan’s 75th birthday, I leave both bulls and bears with this- “You’re Gonna Have to Serve Somebody!”
S&P 500 (SPY) 206 area now pivotal. 208.54 next resistance.
Russell 2000 (IWM) 111.00 pivotal. 113.07 the weekly moving average this must clear and close out the week over
Dow (DIA) 177 point to clear and close above. That will help everything else
Nasdaq (QQQ) 108 now pivotal.
XLF (Financials) 23.35 weekly chart support. 23.75 next area to clear
KRE (Regional Banks) 40.85 the weekly chart support for this to hold and close the week above.
SMH (Semiconductors) 56.00 point to clear above. Then the December high 56.99
IYT (Transportation) 134.27 important support. If through 140.60 get bullish.
IBB (Biotechnology) 267-268 pivotal
XRT (Retail) 40.00 support. 41.75 resistance
IYR (Real Estate) 77.85 resistance although this did manage to get into an unconfirmed Bull Phase
ITB (US Home Construction) Huge move up today.
GLD (Gold Trust) If closes the week under 114.45 I will finally throw in the towel.
SLV (Silver) So that was a top for now. Needs a second close under 15.56 to confirm the warning phase
GDX (Gold Miners) If this wants to play with investors heads, it will rally off today’s lows which is exactly on the 50 DMA.
USO (US Oil Fund) Friendly here with support 11.45. Through 11.90 again is good.
XOP (Oil and Gas Exploration) Must clear 35.22
TAN (Guggenheim Solar Energy) 21.50 support now
UUP (Dollar Bull) 24.55 pivotal with 24.95 substantial resistance
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