Enjoy The Bounty And Prepare For Frost
As I removed the last of the bounty from my container garden ahead of the first frost, I saw this little guy who seems to have the same thing in mind.
This Small Checkered-Skipper is actually female and most likely protecting her eggs. With the mini pictorial stories I write daily, my intention, if not to protect you, is to at least offer some guidance and food for thought.
Tuesday the market watched interest rates and the US dollar firm while the gold, silver and gold miners fell hard. The market (or at least many pockets of it) as no fan of uncertainty, dropped in sympathy.
Wednesday, the trifecta (or as I called it-the three-headed dog), followed through. Interest rates and the dollar rose further while the metals (except for the miners) continued to slide.
However, unlike Monday and Tuesday, the market indices and Modern Family sectors all rallied.
Did the market shrug off yet another round of interest rate uncertainty as economic data supports a modest economic recovery?
Or, was this rally, like the moth and me, just enjoying the last of the nectar before the frost?
What technically changed? Not the warning phases in the Dow or the S&P 500. Not the Russell 2000 in its attempt to negate a possible topping pattern on the daily chart made in mid-September.
Today’s changes for the better begins with the Retail Sector (XRT) Granny hasn’t quite put on her ballet slippers. Yet, the distance today’s rally put between XRT and critical support helped. Follow through over current levels or around 44.00 will increase the confidence all around.
Another positive move in the family came from Biotechnology, which closed back in an unconfirmed bullish phase-needs a second day.
Furthermore, Regional Banks set off to make new 2016 highs. KRE, after 2 inside days trading above the 50 DMA last Friday and this past Monday, was a bright spot yesterday. Today, once the Prodigal Son cleared 42.50 the pivotal area, off he went.
Transportation (IYT) which made new 2016 highs on Tuesday, had its inside day or traded within yesterday’s range today.
Semiconductors, who the market has come to expect a lot from, needs one more little push over Friday’s highs. To her credit, SMH allayed concerns of a topping reversal pattern.
Finally, last week we focused on oil and solar energy, particularly First Solar. Both have now significantly improved in phases.
So with oil, solar, interest rates, the dollar and most of the Modern Family up, why worry about frost?
One reason: tis the season.
S&P 500 (SPY) Pivotal point 215 then 212 rock bottom support. Must clear 217 to keep going.
Russell 2000 (IWM) Working a reversal top unless it gets back/closes over 124.75. The 50 DMA at 122.50
Dow (DIA) 184 to clear and must hold 180
Nasdaq (QQQ) Must close over 119 and hold 117
KRE (Regional Banks) Once cleared 42.50 got the all clear-now that must hold
SMH (Semiconductors) 69.81 point to clear next and 68 to hold
IYT (Transportation) Yesterday, cleared 146, made a high of 147 then sold off. Today an inside day. Topping pattern unresolved
IBB (Biotechnology) Unconfirmed bullish pattern. Must confirm
XRT (Retail) I won’t get that excited until this closes over 44.00.
GLD (Gold Trust) Very near a retracement to a major weekly trendline breakout area now support. And a new low, which always peaks my interest.
SLV (Silver) A reversal happens after a new 60-day low is made and the next day, a good volume rally above the prior day high confirms it.
GDX (Gold Miners) Even better one to watch since tested the 200 DMA
USO (US Oil Fund) 11.38-11.50 resistance area to clear.
TAN (Guggenheim Solar Energy) That gap open over 20.05 was a gift.
TLT (iShares 20+ Year Treasuries) 133 recent low. 136.50 overhead resistance
UUP (Dollar Bull) Until it closes over 25 or under 24.60 I’m neutral
Disclosure: None.