August 11, 2016
By Mish Schneider
Marie Romero Cash-Santera/Folk Artist
Heck, it worked out so well getting into San Miguels’ Protective Service Inc. car yesterday, we might as well call in all the Saints while we’re at it! Oh When the Saints, Go Marching In?
New chart territory in the S&P 500, NASDAQ and the Dow and improved breadth in the Modern Family sectors urges the Bulls to “want to be in that number.”
The featured ETF of the week, TLT or the 20+ Year Treasury Bonds broke back below the 10 daily moving average. We are on high alert for a confirmed failure as a strong indication that the Fed will eventually raise interest rates.
With technical analysis often preceding the fundamantals, now that the market is on new highs, we believe it is only a matter of when not if the Fed will do what they have put off doing thus far.
So, with all the market strength, why then do we call upon the Patron Saints?
For starters, the artistry is quite beautiful to look at. There are about 200 Santos’ all together. The artist above sculpted and painted 28 in her diorama. With Saints for everything from arms dealers to beekeepers to writers, surely there is one for investors?
Actually, no. Closest one I could find is St. Mathew. Bizarre since he was a tax collector and considered the Patron Saint of Bankers not investors.
Ironic when you think about it. Bankers and the Federal Reserve whom investors have counted on as the Patron Saint of the rally since 2008.
Speaking of Bankers, our Prodigal Son of the Modern Family Regional Banks (KRE), traded its 2016 high at 43.00 on January 1st. With the current price at 40.86, St. Mathew has been slacking.
Therefore, with Semiconductors (SMH) the only one in the Family (IWM, IBB, XRT, IYT) on new highs, the takeaway is that the real US economy needs this low interest rate environment to keep the breadth up.
So, while I admire my growing collection of Santos’, I take way more stock in watching how all these divergences in the market will continue to play out.
S&P 500 (SPY) 217.30 the 10 DMA support. Do I hear 220?
Russell 2000 (IWM) Inside day but defended 122. Now pivotal number with 123.53 big resistance
Dow (DIA) Monthly chart overbought so looking for around 188 max on this move
Nasdaq (QQQ) 116.10 the 10 DMA support.
XLF (Financials) January high of 24.27. 23.70 area is now pivotal support
KRE (Regional Banks) 40.36 a support area. 42.00 first big resistance
SMH (Semiconductors) Quite inside day
IYT (Transportation) 138.60 weekly support to hold. Back over 142-way better
IBB (Biotechnology) Must close over 291 to defend the weekly MA
XRT (Retail) Granny picked up with Kohl’s and Macy’s reporting well. 46.00 big resistance
IYR (Real Estate) The reversal pattern from recent highs working
GLD (Gold Trust) 127.27 low this week.
SLV (Silver) If closes this week over 19, third time a charm
USO (US Oil Fund) That 10 DMA held up well. 10.85-11.00 a wall of resistance
TAN (Guggenheim Solar Energy) Inside day on the 50 DMA.
TLT (iShares 20+ Year Treasuries) 137.86 the 50 DMA which it’s been above since June 1.
UUP (Dollar Bull) Better looking again. Needs to clear 25.06
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