June 9, 2018
By Mish Schneider
“Silhouettes are reductions…” is part of a quote by Kara Walker, an artist and film-maker.
She goes on to say that “The silhouette says a lot with very little information..”
A silhouette means a cast or show as a dark shape, against a lighter background.
Last week proved once again, that this bull market may at times cast a dark shape, but winds up visible against the lighter background.
Some dark shapes:
Overheating economy and slowing global growth?
Not so much.
Even with some rotation out of the technology arena, last week ended with promise of follow through this week.
If the dark silhouette of the market casts light on the fine details, what should we expect?
On tap, the FOMC.
My guess, business as usual. I can imagine them saying, “We are on a trajectory to raise rates but will keep the status quo for now.”
Should the Fed indeed not do much, we should expect the Modern Family to continue the path they are currently on.
Transportation (IYT) continues to play out as key for this week’s price action.
Last week, I saw 197 as a critical resistance point to clear. The closing level on Friday was 197.53.
I regard IYT highly as a reliable indicator on the health of US economy.
That, along with the Russell 2000, Retail and Regional Banks, which all closed well.
Therefore, barring any unforeseen silhouette reductions or something that casts a dark outline for the market, we will assume bullish transparency.
S&P 500 (SPY) Inside day. 275 now closer support. Resistance 279-280.40.
Russell 2000 (IWM) Inside day. 168 still the target if holds 165
Dow (DIA) 250 cleared so now it becomes support. 255 some resistance
Nasdaq (QQQ) Above 176 will look better if holds 172.50-173