March 30, 2015
Mish's Daily
By Mish Schneider
Time Got No Time To Wait For Me Hellacopters
With regard to the Simpson’s episode from the mid 90’s “Terror at 5 1/5 Feet", I wrote a weekend homage about the similar scenario playing out in the overall market or what we called “Terror at 18,000 in the Dow.”
If you recall, I compared the gremlin that Bart Simpson sees hanging on the side of his school buy to Janet Yellen with the question, is a Fed Interest Rate hike hanging on the side of the school bus or not?
I further asked, “Is the market going to correct more or rally back to the highs?”
Amazingly, and with no wait time, Monday’s session began with a gap up in the Dow, which then proceeded to continue into a full-on rally leading the Dow right back up to 18,000. Closing price was 17,976.
The S&P 500 rose 1.2% to 2086.24, with banks, homebuilders, and cybersecurity stocks leading the way, just as I wrote to watch last week.
Naturally, we must check in with our Modern Family and of course, our herd of grazing sheep!
Beginning with the senior member Russell 2000s, it gapped higher yet remains below the highs of the huge correction day on March 25th. Volume was extremely light. Grandma Retail (XRT) came very close to the recent highs and one would expect that she will match and take out those highs unless there is some unforeseen nastiness.
Big Brother Semiconductors (SMH) returned to an Unconfirmed Bullish Phase so definitely needs another day above the 50 DMA to confirm. Rocking sistah Regional Banks (KRE) well, rocked; yet could not quite close over the January 6-month Calendar Range high 41.06. Transgender Transportation (IYT) has more work to do and must be kept in focus for signs of impending trouble for the rest of the crew. Finally, Biotechnology (IBB) doesn’t have to do too much-it just has to keep its head above the 50 DMA for now.
The recent Shepherds for the flock come in the form of Regional Banks, Homebuilders, Retail and China-which made new multi-year highs.
And what about Interest Rates or our Gremlin on the side of the bus? Second Inside day in a row (when the trading range is within the trading range of the day prior. In this case within 2 trading days prior). Big eyes here for Tuesday-seems to me, the way the 3 day pattern breaks will have a significant impact on not only the overall market, but the particular sectors and groups that find relief or turmoil from interest rate movements.
S&P 500 (SPY) Cleared 208, what we considered resistance and now will consider pivotal
Russell 2000 (IWM) Cleared over 124.20 now pivotal 126.60 next point to clear to see our way to new highs. Under 124.20 expect a move to the gap 123.23, which would take wind our of the sails.
Dow (DIA) 180.16 next resistance if it holds the 50 DMA or 178.35
Nasdaq (QQQ) 107 next point to clear, 106 support to hold
XLF (Financials) Return to an unconfirmed Bullish Phase which is very good news if holds
KRE (Regional Banks) Could not close over 41.06 yet now has to hold 40.70.
SMH (Semiconductors) 55.64 the 50 DMA to hold now
IYT (Transportation) 159.41 would be good to see clear. In the meanwhile, 155.22 the 200 DMA is what really needs to hold
IBB (Biotechnology) 354 Resistance and 335 major support
XRT (Retail) 101.83 the high to clear
IYR (Real Estate) Lagging due to interest rate concerns-over 80.00 could have a bounce
ITB (US Home Construction) Closed on new multi-year highs.
GLD (Gold Trust) 115 now resistance but did hold the 10 DMA so Monday’s lows good support
USO (US Oil Fund) confirmed Bear phase with 16.87 support and over 17.47 better
XLE (Energy) Back to an unconfirmed Recovery Phase looking for a second close above 78.00
XOP (Oil and Gas Exploration) Like this over 50.00
TAN (Guggenheim Solar Energy) Looking for a new buy
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs see above
UUP (Dollar Bull) 25.58 should hold
EEM (Emerging Markets) Unconfirmed Recovery Phase and still basing
EWG (Germany) Back over 30.00
FXI (China Large Cap Fund) New multi-year highs on great volume
EWY (South Korea) Over 57.77 good point to clear
RSX (Russia) Good close-last time it cleared and closed above the 100 DMA was last September
CORN (Corn) Basing
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