May 1, 2018
By Mish Schneider
In the relentless pursuit of fun in the sun, today, the market (at one point down nearly 400 points), galloped back.
Perhaps it was the refreshing water, nevertheless, Semiconductors SMH, had a lot to do with it.
Whether AAPL spurred her on, or in the spirit of the turnaround Tuesday sentiment, SMH crossed back over the 200 DMA and back into an unconfirmed warning phase (from Distribution.)
That helped the Russell 2000 IWM back into its saddle across the 50 DMA, although it closed just shy of it.
This, in spite of a strong dollar and firming rates.
Now, with FED day tomorrow, we will look for both of those instruments to sustain.
Yet, the better tell is one I have written about over and over—
Will IYT get the memo and hurry up back over its 50 DMA?
AAPL reported today. In anticipation, the stock rallied over 2%. The results led AAPL to rally more than 6% after hours.
Last week, both Geoff and I talked about how that stock is an influencer. And clearly, today proves our point.
However, IYT, the barometer of the US economy, must hang in there. Now in a warning phase, a move over 188.44 would be good.
A move over 191.15 would be better.
One must remember that the weekly charts in the Russell’s, Semiconductors, Biotechnology (although weakening), Retail, Regional Banks and Transportation, have yet to violate the 50-week moving average.
Therefore, the bias is neutral for now. And provided IWM and SMH continue to behave, we can think “friendly.”
Should IYT buck and knock Sister Semi’s off her high horse, the landing might be soft, considering the warm sea’s pristine bottom.
Though, should IYT give SMH a pair of stirrups, its possible to see her supercharge and get back over 100.
Now, that would be “irie!”
S&P 500 (SPY) Held the 200 DMA yet again. Through 268 gets interesting.
Russell 2000 (IWM) Could not quite close above the 50 DMA, but close. A gap higher will bring it to test 155.then we shall see.
Dow (DIA) Over 245-246 way better. 237 support to hold.
Nasdaq (QQQ) 164.27 the 50 DMA. Support down to 155
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