June 22, 2017
Mish's Daily
By Mish Schneider
A Steinway without a pianist on the other side of the window.
A Market without a catalyst on the other side of new highs.
Both images leave us longing for the window to open, a pianist to play, and for us to sit back swept away by the music.
That’s where we sit with one day left to the week and one week left to the month.
Some of you might disagree with me re: “without a catalyst.”
You can argue that the move in Biotechnology is the catalyst.
Or that NASDAQ and the FANG stocks are the catalyst.
Or that a move forward in the American Health Care Act is a catalyst.
Or that Trump’s “apprenticeship” chatter is a catalyst.
Or that the recent move in solar energy is the catalyst.
And you would be right on all accounts. But also wrong.
Wait a minute, how can we be right and wrong?
In the same way one can hear the music even when no one is playing.
Biotechnology (or our Big Brother) deserves a standing ovation. It showed up in a tux, sat at the piano and played Beethoven’s Concerto Number 4.
Yet, the move to 320-323.45 gave longs an opportunity to take profits. It’s also a move right into resistance from 2015 before its big decline.
And as mentioned yesterday, a favorite political football.
As far as NASDAQ and Fang stocks, maybe a standing ovation is a bit overzealous. To their credit, they all recpatured their fast moving averages. And Amazon continues its world domination.
Nevertheless, Facebook, Netflix, Amazon and Google closed in the red.
NASDAQ, like the Biotech ETF IBB, may have had a last gasp run into resistance. After all, without a tangible new catalyst, it will be tough to see the price ignore that giant red bar from June 9th.
The American Health Care Act-cloaked in secrecy until today, has critics. Critics who threaten to vote against its passing in the Senate.
Without comment on whether that’s good or bad, it will be a reminder of a discordant administration.
Trump’s announcment about “apprenticeships. He wants 4.5 million new apprenticeships in five years. Sounds great.
However, catalyst? It wil require big money the government is not willing to spend. Furthermore, it means regulating employers to comply as they will take up a good part of the expense. Loose facts, lofty promises? Currently, there are 505,000 in that program.
The recent move in solar energy? Awesome. However, many states in our country have yet to switch from coal and oil to alternative energy. Our current poliices do not support it and countries outside of the US that do, help but only peripherally.
A market without a catalyst on the other side of new highs? Yes, like hearing music only in your head.
S&P 500 (SPY) Through 245 the rally continues. Under 243 suspicious. Under 240 even more so
Russell 2000 (IWM) Might have failed the channel for real. 140 pivotal. 137.50 support
Dow (DIA) If closes the week under 213.65 a bit of trouble
Nasdaq (QQQ) 141 resistance. 138.75 support. Under 137.70 trouble
KRE (Regional Banks) Confirmed warning phase
SMH (Semiconductors) 82.35 the 50 DMA. Has to clear 86.10.
IYT (Transportation) 170 resistance. 168 pivotal then under 165 trouble
IBB (Biotechnology) 320 target reached. Could see more but I’d trail up a stop if long.
XRT (Retail) Inside day near the lows. 38.10 is hold or die
IYR (Real Estate) 81.00 pivotal
XLU (Utilities) 52.65 the 50 DMA
GLD (Gold Trust) Still like if holds 118 and clears 120
GDX (Gold Miners) Has more to do but I like it.
USO (US Oil Fund) Inside day near the lows
TAN (Solar Energy) Like to see it end the week over 18.80
TLT (iShares 20+ Year Treasuries) 127.37 was the old gap high and now through it see move upside.
UUP (Dollar Bull) 25.40 resistance and under 25.15 not so good
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