Will Friday Bring Market Fireworks or Duds?

July 3, 2019

Mish's Daily

By Mish Schneider

blankWednesday turned out the perfect pre-July 4th trading session.

The Dow, NASDAQ 100 and S&P 500 made a new all-time high.

The Modern Family worked in concert with one another.

IBB Biotech cleared the 50-week moving average.

So did Transportation IYT and the Russell 2000 IWM.

Like fireworks, the day was short and explosive.

Question is, will we see more eye-popping display on Friday?

Interestingly, the money rotated out of SMH Semiconductors, although SMH remains in a bullish phase.

Retail XRT continues to struggle as do Regional Banks KRE.

What we want to see for Friday is confirmation in IYT, IBB and IWM, or another day above their 50-WMAs.

We also want to see XRT clear 43.15 and KRE clear 55.10.

Otherwise, we can have a repeat of May 3rd. That is the day that KRE hit it’s 50-WMA. It was obvious that it struggled to reach that level and therefore, spelled the top of the overall market. That is, until the new highs we saw on Wednesday.

The lukewarm economic stats are giving cheer to investors as they see lower rates on the horizon coming to save the day.

However, consumerism and regional banking will have to join the party for real. Othewise, we could see IWM and IYT in particular, giving up their 50-WMAs once again.

Like folks who never learn to clear away from a lit firecracker thereby suffering injuries, investors may have to learn a hard lesson that negative rates might turn out equally dangerous.

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S&P 500 (SPY) 298.82 printed a new all-time high. Support at 296.92 the old high

Russell 2000 (IWM) 154.70 is the major pivotal 50-WMA to hold 161 resistance overhead.

Dow (DIA) 269.60 the new all-time high. 267support

Nasdaq (QQQ) 191.44 the new all-time high. 188 support

KRE (Regional Banks) Inside day. Unconfirmed recuperation phase with 53.30 first pivotal area and 55.10 overhead resistance

SMH (Semiconductors) 115.70-116 resistance. Support at 110 then 108.80

IYT (Transportation) 190 first level to clear again. Support at 188.65.

IBB (Biotechnology) 109.45 the pivotal support. 111.50 resistance

XRT (Retail) 42.45 pivotal area-has to get back above 43.15. Support at 41.75

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