When a Strong Market Brings Out Our Best

September 27, 2017

Mish's Daily

By Mish Schneider


blankI just love this photo!

Shot by a friend of mine in New York City, it's a fantastic representation of a better class of panhandler.

The Russell 2000 made yet another new all-time high along with his sibling, the transportation sector, IYT.

One has to wonder, whether the market's optimism has trickled down to the bottom of the 99%.

Perhaps, in a world filled with accusations of fake news, our panhandler has just decided to be honest!

Regardless, I do find it satisfying that the sectors that represent the most salient aspects of the US economy are the ones that are leading the current rally.

Yesterday, apparently Janet Yellen took notice.

She came out and said that not only is the Federal Reserve on target to start reducing their balance sheet, but that she was also less concerned about inflation under 2% and more concerned with raising the rates.

This is exactly the type of confidence the market has been waiting for. An optimistic Federal Reserve and a boost to the US dollar.

So, has the market finally sated our need for the basics and led us to seek more serotonin?

Today was a reason to celebrate.

The Russell 2000 now trades well above the monthly channel.

Bonds look like the beginning of the end for the low interest rates we've enjoyed the last eight years.

Might I be so bold as to finally welcome the blowoff rally or the Fifth Stage of Disbelief?

Volatility, which never really made a comeback, is on the decline.

Commodities we've been tracking-gold and gold miners-sold off back into complacency. I did hear however, that gold calls looked more attractive as many options were bought today.

Oil, on the other hand, looks poised.

So far this month, IWM is above the channel line. That means that if IWM closes out September above 144, which looks probable, it will be the first time ever that has happened. BIG!

If the market has a melt up on the way, we technical traders will be on the lookout for massive volume, exhaustion gaps and blow off tops.

Until then, enjoy the high-real or manufactured-and have a bag of Doritos while you're at it.

No commentary Thursday due to traveling. Will have a Daily for you over the weekend.  Thanks.

S&P 500 (SPY) 248 support to hold. 250 pivotal

Russell 2000 (IWM) up 2% today and above the monthly channel line. 144-145 support.

Dow (DIA) 223.95 pivotal

Nasdaq (QQQ) Unconfirmed Bullish phase with 145 resistance and 143.50 point to gold.

KRE (Regional Banks)  Matched the July high around 56.50. That's the place to clear and 55 the place to hold

SMH (Semiconductors) 91.00 now support to hold. Then 89.25. Resistance at 92.90

IYT (Transportation) 175.75 pivotal   Looks great.

IBB (Biotechnology) 327-337 range to break one way or another

XRT (Retail) Granny sure woke up. 41.55 now pivotal support. 42.25 resistance.

IYR (Real Estate) See-saw action within a channel going back to February. One day this will move big.

GLD (Gold Trust) Broke 122.58 the 50 DMA. Now pivotal resistance 

SLV (Silver) Unconfirmed bearish  phase.

GDX (Gold Miners) 22.80 area is the place this has to hold.

USO (US Oil Fund) A weekly close over 10.47 good. A monthly close over 10.65-game changer

XLE (Sel Energy Spdr Fd) 68.80 the 200 DMA-close

OIH (Oil Service Holders) Over 25 now pivotal

TAN (Solar Energy) 21.00 now bottom line support. 22 resistance

TLT (iShares 20+ Year Treasuries) 126 resistance with 120 next major support

UUP (Dollar Bull) 24.12 the 50 DMA and 24.30 the 200 week moving average

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