Will Our Market Mascot Hammy, Take a Dreaded Bath?

February 21, 2019

Mish's Daily

By Mish Schneider

blankToday is a good day to revisit Hammy the Pig, our mascot for the Year of the Brown Earth Pig Sitting in Water.

If you recall, Raymond Lo, my go-to Chinese astrologer wrote,

“Pig is the stage when fire is “Terminated” and the fearful water element is going to takeover.  As water symbolizes fear, there is lacking of optimism in the Pig year and it will bring decline in economic growth and activities leading to longer term setback of the stock market and more economic crisis will come up.  As there will not be return of fire year until 2025, we expect a long-lasting bearish market ahead.”

Since the New Year began early February, the market continued to climb, which made this prediction seem less likely.

However, as rallies in bear markets are notoriously some of the best rallies, with the prediction I made just last night:

“Russell 2000 (IWM) 157.03 is the 50-WMA and 157.88 the 200-DMA. November 8th high 157.90. There’s your resistance. And under 157, especially on a closing basis a sell signal.”

Is it time for the Hammy the Pig to take a very unwanted bath?

The other factor to consider is how Transportation IYT performs from here.

IYT, although closed red, it did not really show us any great weakness.

IYT remains above the 50-week moving average and the 200-daily moving average.

Therefore, even though the Russells flashed a sell signal today closing under 157.00, IYT keeps our Hammy in mud for now.

With the week about to end, if IWM gets another close under 157 and if IYT breaks 189.70 (50-WMA), then by all means, get out the water hose and prepare to soak the pig.

S&P 500 (SPY) 280.40 the last December swing high before the crash. 276.00 is the important support to hold on a closing basis

Russell 2000 (IWM) 157.03 is the 50-WMA and 157.88 the 200-DMA. November 8th high 157.90. There’s your resistance. However, with the close today over 156.53 (Wednesday’s low), IWM failed to have a reversal topping pattern. So, game still on for now

Dow (DIA) 255.50 support. With 260.30 the last swing high in December before the crash.

Nasdaq (QQQ) 172.02 the 200-DMA now pivotal. 170.50 support

KRE (Regional Banks) 58.18 the 200 DMA overhead with 56 the best underlying support

SMH (Semiconductors) 104-105 resistance with 102 is the immediate area to hold.

IYT (Transportation) 189.20-192.27 the range to watch break one way or another. With 190.26 the 200 DMA and 189.71 the 50-WMA

IBB (Biotechnology) 109.83 the pivotal point.

XRT (Retail) 44.67 pivotal for the week.

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