December 7, 2017
By Mish Schneider
I begin with the preface that a bounce from support levels saves the day.
But will it take the market up to 25,000 where surely our Gremlin on the wing of the plane sits?
Speaking of planes, I sat on one last night on my way to a business convention.
With little to do except stare at the wing of that plane, I watched Jim Cramer on Mad Money.
He literally listed 12 “worries” about events that are transpiring and could transpire that would appear not only as gremlins, but as nightmares.
I share and have written about all of Cramer’s concerns over the course of the year.
Nevertheless, the market’s resiliency is like auto-pilot.
Hit support levels, buy the dip?
We watch to see if the bounces become shallower.
For example, let’s examine Sister Semiconductors (SMH)-a perfect case of the Wonder Woman leader now sought by fresh buyers on every dip.
SMH traded in a warning phase or below the 50 daily moving average was in July and then again in August.
Here we are in December and SMH trades below the 50 DMA again.
In July, the bounce took it to 90.00-yes, remember 90? By August SMH fell to 88 area.
Then that bounce helped catapult SMH to the high in November just shy of 106.
The current sell-off fell to the critical exponential weekly average at 96.55.
Hello fresh buying.
We have not had a weekly close under that exponential MA since May 2016.
What do we watch for now?
100 is more psychological than technical, however it could turn out as such if SMH fails to clear that level.
Therefore, while you count down to the 12 days of Christmas and ponder Cramer’s 12 legitimate reasons to worry, should SMH fail to reach 100 and then close a week out under 96.50, you better hope that her rope twirler has some strong arms to catch her.
And that if he is indeed a rope twirler and not a gremlin.
S&P 500 (SPY) Confirmed reversal unless with fast MA support 263 and better if can clear over 265.
Russell 2000 (IWM) 149.40 the 50-DMA. In markets that have topped out, it would be typical to see this go into a warning phase before the other 3 indices. Back through 152 would be better
Dow (DIA) 240.30 the 10-DMA with this confirmed reversal pattern. Through 244 better
Nasdaq (QQQ) 151.10 the 50 DMA and then 149.50-which like the exponential MA in SMH means a lot!
KRE (Regional Banks) 58.50 must hold the fast MA
SMH (Semiconductors) 96.50-100 range for now
IYT (Transportation) 181.65 the fast MA to hold
IBB (Biotechnology) 103 should hold if good and better if clears 105
XRT (Retail) 44.05 the support to hold
GLD (Gold Trust) 117.95 the 200-week moving average-an institutional investor’s line in the sand
XME (S&P Metals and Mining) Like if clears 32.33 and holds
USO (US Oil Fund) 10.90-11.50 range to break
TAN (Solar Energy) 23.50 pivotal as the 50-DMA
TLT (iShares 20+ Year Treasuries) Reversal with 125.25 the 50 DMA
VXX (Volatility Index) held 31.05 recent low
UUP (Dollar Bull) 24.43 200-week MA resistance
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