Market two-faced? Wearer of many masks? Nah!!! Is it a comedy, tragedy or a little of both? Yeah!!!
What about the word "tragedy" derived as a compound of two Greek words: (tragos) or "goat" and (ode) meaning "song?"
Were our bleating goats bleating on Monday? Affirmative.
Over the weekend we visited my modern family. Now that they have had a chance to holiday and eat well with one another, let’s check back in.
Transportation (IYT) confirmed the Distribution Phase, which means even with the market strength, it could not clear back over the 200 DMA. I find this concerning. Clearly a reflection on not only the slower job growth after last week’s numbers, but also an indication that the economy needs more work at its core.
Semiconductors (SMH), I would give a “C”. Sure, they closed right above the pivotal point 54.85 but they remain in a warning phase. Unless they clear 55.70, weakness prevails.
Biotechnology (IBB), didn’t fall apart but certainly did not evoke major confidence either since it could not bounce more convincingly off the 50 DMA (although in a bullish phase at least), and could not close over 340.
Grandpa Russell 2000’s, as mentioned, might be more entertaining, but will not get a standing “O” from yours truly until it clears 125.60.
Granny Retail (XRT) is the favorite for the Golden Globe, basing near the highs. SisterRegional Banks (KRE) is a contender, but has to really clear 41.20 now and hold 40.00.
We had some stellar performances, particularly in the oil and oil holders and energygroups. Gold cleared the 50 DMA to change to a more positive phase. This does seem to suggest that the Fed might have a better reason to raise the interest rates by June, but it does not serve them just yet to commit to that one way or another.
I do find it interesting that expectations have been for deflation to be the big reason for a market decline, when in turn, it seems that it could be more that the Fed will lose the grip on low rates in the US while the rest of the emerging markets defends them and commodityprices increase.
While the world turns and the drama plays out, I will remind you of our friends the sheep and their predictable habits. We saw them retreat last week and see them grazing to start this week. They do not run for the hills, nor do they separate too long from the herd. Keep your overall active trading light, think about some of the countertrend trades finally basing, like the commodities and a few other choice equities, and take quicker profits on the momentum trades.
S&P 500 (SPY) Unconfirmed return to a Bullish Phase. Held 204 early then cleared 208 later on, but could not close above it. Subscribers: Positive Pivots in all
Russell 2000 (IWM) Need to see this over 125.60 and under 124.20 trouble
Dow (DIA) Unconfirmed return to a Bullish Phase. Cleared 178.50 which is good if holds. We have a couple of bottoms at 175.50 area
Nasdaq (QQQ) Unconfirmed return to a Bullish Phase. 106.50 has to clear or under today’s low trouble
XLF (Financials) Unconfirmed return to a Bullish Phase. The 50 DMA is key here and in the 3 indices which cleared it today as well
KRE (Regional Banks) A close over 41.20, I think I love you
IYT (Transportation) Unless this gets back over 155.42 pay attention
IBB (Biotechnology) Under 334 trouble
XRT (Retail) Like to see this clear 101.83 and hold 100.00
IYR (Real Estate) If holds 80.00 good or under 78.60 see more downside
ITB (US Home Construction) Possible reversal candle
GLD (Gold Trust) Unconfirmed Recovery Phase provided it holds 116.08
USO (US Oil Fund) Unconfirmed Recovery Phase provided it holds 17.70
XLE (Energy) Great trade if took the move over 78.00. Now, has to hold there
XOP (Oil and Gas Exploration) Great move over 50 now running into resistance at 53.00
UNG (US NatGas Fund) Possible reversal candle last week and a double bottom with an inside day to start the week
TBT (Ultrashort Lehman 20+ Year Treasuries) Evidence of market perception on rates and a rise here with the TLTs breaking back under the 50 DMA
UUP (Dollar Bull) 25.40 is the 50 DMA
EEM (Emerging Markets) Been writing about the basing since middle of March-today it cleared the 200 DMA
EWW (Mexico) Got the close over 60.00. Now a dip buyer until 60 breaks
RSX (Russia) Gave the stream this one too over 17.40-now, took some profits and waiting to see if can muscle to the 200 DMA
CORN (Corn) Over 26.00 gets interesting
BAL (Cotton) Cash was the place been talking about