Archives: Mish's Daily

The Market’s Chinese Brown Earth Dog Gets Wet

Mish Schneider | October 17, 2018

Some of you may recall that I covered the Chinese Astrological sign for this year in February. The prediction for the market said that the cycle of fire elements ended in 2017. “The 2018 Year of Dog represents Grave of Fire, which means the optimism of fire is going down and the pessimism of water will come up. The fire element will not return until 2025. Therefore, the general economic atmosphere is entering a bearish cycle

Abracadabra: The Market Trapdoors the Bears

Mish Schneider | October 16, 2018

But, was it really hocus pocus? After all, the S&P 500 held the 50-week moving average as did the Retail Sector XRT, and Biotechnology IBB. Furthermore, NASDAQ QQQ put in a reversal bottom. And the Russell 2000 IWM, held the monthly channel. Moreover, IWM and SPY both had inside days. Statistically, the way the range breaks yields follow-through. Yesterday I wrote, “With the multi-month low and today’s inside day, a move over 155.76 could take

The Russell 2000 in Three Timeframes

Mish Schneider | October 15, 2018

As some of you know, I call the Russell 2000 IWM, the Granddad of the U.S. Economic Modern Family. I do so because the Russell is comprised of 2000 small cap stocks that are 99.86% located in the United States. He’s kinda cute and super important. On Friday, IWM made a new multi-month low. Today, IWM had an inside day. Thus far, ok-a bit early to tell-IWM has an inside week. Two of the three

In Any Language, Market Puts Up a Cautionary Sign

Mish Schneider | October 14, 2018

If ripened fruit has not been picked from a tree, it will eventually fall. For those unwittingly standing beneath that tree, falling fruit can cause a nasty bump on the head. Considering how overripe the market and economy have been, not surprising many traders got a nasty bump on their heads. Let’s begin with the 4 potential scenarios in the Russell 2000 IWM, we watched for a setup on Friday: Some sort of bottoming formation

Breakdown in Daily and Weekly Charts; Monthly?

Mish Schneider | October 11, 2018

On the daily charts, the Russell 2000 IWM broke down on September 26th, when it closed below the 50 DMA and into a Warning Phase. Then, last week, the first breakdown on the weekly chart confirmed under a key exponential moving average This week, IWM broke the 50-week moving average for the first time since March 2016! Hence, we go out further to the monthly charts. What can we gleam from IWM’s monthly chart as

What the Market’s Plunge Protection Team Looks Like

Mish Schneider | October 10, 2018

On August 22nd, I wrote a blog called “Can the Market Live on Canned Rations?” In it I wondered about the threat of the Transportation Sector: “Transportation IYT, made a new all-time high, but closed beneath 206.90 and the older ATH (all-time high) at 206.73.” I went on to say, that “Transportation can either blast off from yesterday’s high or put in a very neat double top.” On 8/22, IYT broke the first line of

When the Transportation Sector Breaks Down

Mish Schneider | October 9, 2018

Take a good look at the photo. You will see a really long line that extends well out-of-sight. We stood on that line from 1 AM until 5 AM along with the rest of the crowd. Maybe it was the hour, but everyone was really chill considering. Why were we on the line? Because the airline canceled all their flights so folks had to rebook. The airline employed 2 agents to rebook about 1000 people.

Key Week for the Economic Modern Family

Mish Schneider | October 8, 2018

Last week, the Semiconductors ETF closed under the 50-week moving average for the first time since November 2016. Three weeks before, the Regional Banks ETF (KRE) broke its 50-week moving average. However, KRE does not have the same record as SMH. Whereas SMH broke a nearly 2-year trend, KRE waffled up and down the 50 WMA in 2017. Not insignificant though, in that KRE held the 50-WMA for a year. Bigger point is that we

Can the Bulls Count on Corporate Suits?

Mish Schneider | October 6, 2018

Starting with last Monday, the divergence between the Dow and the Russell 2000 became a hot topic. All throughout the week, rates and the dollar rose along with oil. The Dow made a new high, but did so all alone. The phases in many important sectors deteriorated. The market breadth weakened enough to cause a substantial sell-off by Friday. The Semiconductors ETF closed under the 50-week moving average for the first time since November 2016.

Market Bulls Have A Bullseye on Their Backs

Mish Schneider | October 4, 2018

Our radar screen lit up today as many instruments changed phases for the worse. Transportation (IYT), such a big focus as the one to tell us what’s next, went into an unconfirmed warning phase. Semiconductors (SMH) went into an unconfirmed distribution phase. That means it went straight to jail breaking down below the 50 Daily Moving Average without stopping at the 50 DMA. Biotechnology (IBB), another unconfirmed warning phase. Regional Banks (KRE), confirmed the Distribution