As a part-time actor in our local community theaters, I think a lot about the iconic Comedy and Tragedy Mask. The masks were taken from Greek Mythology and were worn in the Greek theater to distinguish the different emotions of the characters. Actors were able to play more than one character because of the masks. In fact, the actors could truly be called two-faced!
The market too, has many masks, with both Comedy and Tragedy alive and well depending upon where one looks. Before I go further, I nearly fell out of my chair when I read this: The word τραγ?δ?α (tragoidia), from which the word "tragedy" is derived, is a compound of two Greek words: τρ?γος (tragos) or "goat" and ?δ? (ode) meaning "song."
Goat??? Or in this case, goat song. As in sheep as in ram as in The Year of the Bleating…according to the Chinese New Year. How’s that for synchronicity!
What masks is the market donning? Beginning with tragedy and sticking to my modern family-Transportation (IYT) remains weak (Distribution Phase), therefore a concern. Transportation is a reflection (in my amateur economist’s viewpoint) of a still fledgling US economy, which many still believe measures with a Shakespearean tragedy.
Next, Semiconductors (SMH), closed right on the pivotal point 54.85 which means Monday should be decisive on which mask this group decides to put on. SMH remains in a confirmed warning phase.
Biotechnology (IBB), had an inside day last Thursday and held the 50 DMA therefore, didn’t fall apart necessarily. Yet, IBB closed red and looks heavy.
Who’s wearing the mask of Comedy? For one, Grandpa Russell 2000’s. Now, comedy doesn’t necessarily have to be ha ha funny-it could represent satire. Here’s where this seems to weigh in. The slope on the fast moving average which it marginally held, is sloping down. Although the phase is strongly bullish, the high of the nasty March 25th candle or 125.60 really has to clear to get the audience laughing! After all, a laugh track is no substitute for the real thing!
Then there’s Grandma Retail (XRT). Well, she having a heck of a good time, basing near the highs. She gets to keep the Comedy mask. Finally, we look at Sister Regional Banks (KRE). This one I continue to love. It’s holding support, slopes are positive and we can count on one more move over the 41.20 area to push her center stage.
As the origin of the masks were intended to allow the actors to play many different roles, so will the market continue to demonstrate diversity with both comic and tragic players alike.
“All the world’s a stage, and all the men and women merely players. They have their exits and their entrances,
And one man in his time plays many parts…” William Shakespeare
Happy Passover and Easter!
S&P 500 (SPY) Held 204, now looking at 208. Subscribers: Positive Positive in all
Russell 2000 (IWM) Over 125.60 should help the rest of the market and under 124.20 trouble
Dow (DIA) Really, over 178.50 is the place to clear and now we have a couple of bottoms at 175.50 area
Nasdaq (QQQ) Inside day. 104.50 major support with 107 major resistance
XLF (Financials) Over 24.25 new ballgame.
KRE (Regional Banks) A close over 41.06, I think I love you
IYT (Transportation) Unless this gets back over 155.40 quick, pay attention
IBB (Biotechnology) Over 344 and we can say thank you!
XRT (Retail) Like to see this clear 101.83 and hold 100.00
IYR (Real Estate) Over 80.00 could have a bounce and under 78.60 see more downside
ITB (US Home Construction) New highs on Thursday
GLD (Gold Trust) Inside day. 116 next point to clear and 115 support now
USO (US Oil Fund) Inside day. Has to clear the 50 DMA to keep going
XLE (Energy) Looking for a close above 78.00
XOP (Oil and Gas Exploration) Held 50.00, now pivotal
UNG (US NatGas Fund) Possible reversal candle last week and a double bottom
UUP (Dollar Bull) 25.40 is the 50 DMA
EEM (Emerging Markets) Basing and now near the top of the range
EWW (Mexico) All about a close over 60.00
FXI (China Large Cap Fund) I hope some of you are long here since been bullish all year and noted such
RSX (Russia) Like to see it hold 17.80 level now.
CORN (Corn) Over 26.00 gets interesting
SGG (Sugar) Cash cleared 12.37 with a strong performance-SGG needs to hold 31.10
* am a lonely painter, I live in a box of paints,
I’m frightened by the devil, And I’m drawn to those ones that ain’t afraid.”
I hope my last 2 blog’s references to the devil (both from favorite musical artists from the late 1960’s early 1970’s) doesn’t scare anyone too much. I have, however, been writing aboutterror, gremlins, sheep and shepherds since last Sunday-partly because the market is relatively spooky and partly because we are about to have a deeply religious weekend, for those who observe.
The Joni Mitchell song lyrics refer to us traders waiting for clarity. We respect the market’s weakness and we find ourselves drawn to both the fearless bulls and bears all at the same time. (Plus, she is in the hospital so we send her our thoughts and prayers).
We are in a unique environment with an optimistic yet dovish Federal Reserve regarding the US economy and any hints at a rate increase (as in doubtful for the time being). Simultaneously, we see Emerging Markets adding liquidity and China’s ETFs on new multi-year highs. Add to the mix, concerns in Iran, Yemen and Syria. Total all those factors together and what do you get? Warning Phases now confirmed in the Dow, S&P 500 andNASDAQ and a Bullish Phase in the Russell 2000s (with a solidly good close I might add, over Tuesday’s low.)
I love my modern family since it helps me keep track of the top sectors and groups that relate directly to the overall market tone (and the allegory has been spot on). Retail (XRT) did not confirm the topping formation and has a very positive bullish phase intact. Regional banks(KRE) is my go-to if the market stabilizes for sure, Transportation (IYT) under 154.35 is in more trouble which if coupled with Semiconductors (SMH) under 54.85 spells double trouble (closed right at 54.85). Biotechnology (IBB) has one job-to hold the 50 DMA, which it is trying hard to oblige.
Joni sums it up best;
“She knew your devils and your deeds.
And she said, "Go to him, stay with him if you can
but be prepared to bleed.”
S&P 500 (SPY) Held 204, now looking at 208-ping-pong anyone? Subscribers: Negative Positive in all
Russell 2000 (IWM) Over 125 should help the rest of the market and under 122.25 see the 50 DMA
Dow (DIA) Really, over 178.50 is the place to clear and now we have a couple of bottoms at 175.50 area
Nasdaq (QQQ) 104.50 major support with 107 major resistance
XLF (Financials) Over 24.25 new ballgame.
KRE (Regional Banks) Over 41.06, I think I love you
SMH (Semiconductors) Over 55.75 now has to clear and like to see this hold around 54.85
IYT (Transportation) 155.34 the place to hold
IBB (Biotechnology) Over 344 and we can say thank you!
XRT (Retail) Not a reversal candle
IYR (Real Estate) Lagging due to interest rate concerns-over 80.00 could have a bounce and under 78.60 see more downside
ITB (US Home Construction) Correction not topping
GLD (Gold Trust) 116 next point to clear and 115 support now
USO (US Oil Fund) Has to clear the 50 DMA to keep going
XLE (Energy) Looking for a close above 78.00
XOP (Oil and Gas Exploration) Held 50.00, now pivotal
TAN (Guggenheim Solar Energy) Looking for a new buy
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs rallied into resistance
UUP (Dollar Bull) Inside day
EEM (Emerging Markets) Basing
EWP (Spain) Looks good over 36.50
RSX (Russia) Like to see it hold 17.00
BAL (Cotton) Basing maybe
SGG (Sugar) Cash over 12.37 interesting