Will The Market Tell Mr. Trump He’s Fired?

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If you recall, stocks kicked off the week in bullish mood right from the opening bell, and I concluded that day’s commentary with the note that Mondays in a bull market tend to have a bullish bias, but that says nothing about the week.

Today’s strong trend down day, and several patterns that it has created suggest that the bulls may be under a lot of pressure now.

Here are a few patterns to keep your eyes on:

1. SPY has a classic double top look with yesterday’s high being an all time high.
2. SPY, DIA, and IWM all entered a Warning Phase.
3. All of the Modern Family had big range days that continued to trend lower than their 30-minute Opening Range.
4. Despite the new highs being made by the QQQ over the last several weeks, the number of new 52 week lows was also rising. This suggests weakness that could spread. You can see the chart here: https://marketgauge.com/resources/littlebigview/?tab=5&chart=4
5. KRE and IYT are close to breaking their YTD lows.
6. The TLT had its biggest up day in a while, indicating a real move to risk off.

These are all bearish patterns that represent the market giving President Trump a big thumbs down with regard to his behavior.

Some might even go so far as to say he’s at risk of being FIRED!

However, we don’t need to worry about that quite yet, and more importantly our focus should be on whether today’s action is the beginning of a new trend or another fleeting one day victory for the bears.

The key for the next few days in determining whether or not the market will continue lower is to simply wait for a 30 minute opening range breakdown below today’s low. If that happens expect more downside.

However, until that happens remember how resilient this bull market and the President have been at bouncing back from bad days.

As for getting bullish, I’ll wait for a positive pattern to develop first.

S&P 500 (SPY) Classic looking double top. Sitting in a support area, but closed under the 50 DMA and had a very convincing trend down day. 235 could be support, then 233, and 231.60 is the major swing low. Resistance tomorrow will start at 236.75 then 237.75

Russell 2000 (IWM) Look for support in the 133-134 area, the nte 200 DMA at 131

Dow (DIA) Closed under 50 DMA, should find support around 205. If it breaks 203.60, 200 is the next stop

Nasdaq (QQQ) Biggest down day in a long, long time. Next big support is not until the 50 DMA at 133.56

KRE (Regional Banks) Tested and held the key low of the year levels around 51.40. If that breaks the 200 DMA is the next stop at 50.37.

SMH (Semiconductors) Erased 5 nice up days to fill a break away gap. Closed under the 10 DMA. Big support at 80.50-80.00

IYT (Transportation) Lowest close of the year. Right above the lowest low of the year. 200 DMA is 157.18

IBB (Biotechnology) 287-284 the key support area..

XRT (Retail) Testing big support area 40.50-41.00, but hard to believe it will hold

IYR (Real Estate) Stuck between 77 and 79, but it was up today!

GLD (Gold Trust) Gapped over the 50 and 200 DMA, but needs to get over 120 to look good

SLV (Silver) Closed up but 16 area is pivotal and it didn’t hold up very well.

GDX (Gold Miners) wait for a break over the 200 DMA of 23.94.