- Trading Ideas
- My MarketGauge
Market Overview: Use this page for a quick measure of the markets over several important time frames, and see whether the volume based accumulation or distribution measures are flashing a significant bullish or bearish warning sign.View a Help Video About This Page
October 8, 2015
By Mish Schneider
The fly on the wall at the Starbucks, where Janet Yellen buys her Pumpkin Spiced Latte’s, has given us good authority to believe she’s is long commodities.
I’d like to say that we planted that fly on the wall as I have been writing about commodities and the bottoming action for months. Truth be told, at the time I began hawking commodities, I was pretty convinced that the FED would announce a rate rise.
So much for armchair economist or amateur psychic predicting the contents of Janet’s head.
Thank goodness, however, for good ole fashioned chart reading!
Agricultural Commodities-Especially Sugar-Often An Early Sign
Sugar cane quite literally changed history. Columbus brought the plant to the Caribbean. And Sugar, molasses and rum were exported becoming the economic basis for European colonies in the New World.
Sugar cane is by far the most efficient converter of solar energy. A week and half ago, I wrote a plea for us to put our collective consciousness together to help Solar Energy rally. TAN, the ETF for Solar was trading at 25.00 at the time. Currently, TAN is trading 31.77!
Sugar, as traded through SGG, the ETF, has probed the 200 DMA for the first time since May 2014.
Which Other Commodities Might Take Sugar’s Cue?
Going back to Starbucks, the stock (SBUX) has had an incredible run, actually make new highs during Thursday’s session. Coffee as examined through JO, the ETF, could be ready to play some catch up.
The fly on the wall at Starbucks could also be telling us that Oil, Energy, Gold Miners, all already up from multi-year lows, are lying in wait for a weaker dollar.
Of course, that fly is straining its little ears to see if Janet is considering more Quantitative Easing. After all, the FED has stated concerns about the global economy and low inflation for quite some time.
Bottom line, our Modern Family, which I wrote about extensively on October 7th, all partied after the FED’s statement. Although metals retreated some, oil, coffee and sugar held firm. The US Dollar, which many commodities are tied to, dropped.
Curiously, Interest Rates firmed. For now, the Dow (which found a cushion at 16,000) has lead this rally and is now overbought on the daily and weekly Relative Strength Indicators.
I am keeping my eyes on sugar and coffee primarily, along with the other commodities.
The Fly, in the meantime, is screaming, “Help me, Help Me” ready to take a nosedive into Janet’s Pumpkin Spiced Latte!
S&P 500 (SPY) Unconfirmed phase change to recovery. Needs another day over 199.65 to confirm. September 17th high 202.89
Russell 2000 (IWM) Rallied right to the 50 DMA and stopped. Still in a bearish phase unless it can break the 50 DMA at 115.71. 114 pivotal
Dow (DIA) Still have a negative sloping 50 DMA at 167.36 making that the support level to hold. Filled a gap from August 20th. Generally that is a good sign
Nasdaq (QQQ) Marginally cleared 106 to put in an unconfirmed Recovery Phase. Support at 104
XLF (Financials) Still consolidating even with all the fun
KRE (Regional Banks) Confirmed bull phase and MATCHED the September 17th high at 42.53. Wow
SMH (Semiconductors) Let’s see what happens at 53.00 and to if it can hold 52.00
IYT (Transportation) First close above the 100 DMA since March. However, not near the September 17th high at 149.86
IBB (Biotechnology) 310 pivotal, still
XRT (Retail) 46.63 the 50 DMA resistance with 45.50 support to hold
IYR (Real Estate) 74.01 gap filled with support now at 73.25
ITB (US Home Construction) “When an instrument has erratic up and down action around a major moving average something bigger is coming” Today it went into an unconfirmed Bull Phase-needs to confirm
GLD (Gold Trust) 5 probes of the 100 DMA since August means that once it clears its good to go.
GDX (Gold Miners) 15.00 area should hold
USO (US Oil Fund) Into some resistance here so waiting for a dip closer to 15.00
TAN (Guggenheim Solar Energy) Overbought with a confirmed recovery phase. Since I wrote about Solar energy, this has done nothing but rally
TLT (iShares 20+ Year Treasuries) Broke the 50 DMA
UUP (Dollar Bull) 25.00 resistance. 24.60 support
FXI (China Large Cap Fund) Like nothing happened.
DBC (DB Commodity Index) Looks good
SGG (Sugar) Unconfirmed Accumulation Phase