September 11, 2017
By Geoff Bysshe
Last week the stock indexes were stuck in a tight range, as the TLT and GLD rallied while the dollar fell (UUP).
Despite the apparent building fear in the markets, the VXX just consolidated.
Today, last week came undone. TLT, VXX, and GLD all had big declines and the SPY broke out to new highs with its biggest one day percent gain since April.
Interestingly, some of the big movers were IYR (Real Estate), and XLU (Utilities). These moves seem counter intuitive to the recent correlation with TLT which was down big today. Plus, these aren’t areas that would give the bulls confidence for a continuation of the SPY’s breakout.
However, both IYR and XLU broke out above key levels, so they are worth watching for trades on pullbacks.
Another concern is that IWM didn’t trade over last week’s highs, and the QQQ, was up nicely but didn’t break its all-time highs.
Fortunately there was some movement in sectors that are more indicative of a continuing bull move.
IYT (Transports) broke out of tight consolidation and convincingly into bullish phase territory. This is a big change from a few weeks ago when it looked like it was going to breakdown under its 200-DMA.
Additionally, the SMH rallied nicely and KRE bounced back above its breakdown level. If KRE can put in a reversal pattern like we’ve seen in XRT and even better IYT, then the bulls will have a lot of fuel for the SPYs to move much high.
There’s hope for today’s breakout, but there’s also a lot support needed to make it really work. Keep your eyes on the Modern Family.
S&P 500 (SPY) Big breakout to new highs. Look for intra-day support at 248.80, 248.40, and then big level to hold now is 248. Look for support at 247.50. Resistance at 250.
Russell 2000 (IWM) Didn’t breakout. Needs to clear 241. Support at 140 then 138.45 is important support to hold and then 137.25 and 136.25. Resistance at now at 141 and then 142.30.
Dow (DIA) Big day but not at new highs. Support at 220. Resistance at 221.10 then new highs over 221.68
Nasdaq (QQQ) Nice up day but stopped at 246 resistance level. Look for support around today low,145.30. Resistance is at 146 and then the highs at 146.60.
KRE (Regional Banks) Very impressive up day. Could be forming a head fake breakdown pattern, but still Negative until closes over 52. Support should be around 51. Needs to close over 52.
SMH (Semiconductors). Nice big day. Look for support at 88.70, and resistance at 89.37 then new highs at 89.72.
IYT (Transportation) Big breakout over days of consolidation. Look for support around 170. Resistance at 172.
IBB (Biotechnology) Another consolidation day in a sector with nice compression at highs. Support around 330-328.80. Breakout above 336.80.
XRT (Retail) Consolidation day. Should hold 39.75. Resistance around 40.75
IYR (Real Estate) Strong day that finally cleared 82 which should now be support. Resistance at 83, and 83.50.
XLU (Utilities) Big breakout and trend day higher. Support at 54.40 and 53.60. Strong sector that is outperforming SPY.
GLD (Gold Trust) Pulled back to the 10-DMA. Support at 126 and 125 and resistance at 127.50, then last week’s highs at 128.32.
GDX (Gold Miners) Pulled back with GLD, and closed under the 10 DMA. Look for support at 24.45. Expect a resistance at 25.00, 25.70 and then more at 28.25
SLV (Silver) Pulled back to 10-DMA. Look for support at 16.30-.20. Big resistance at 17.40, and 17.50.
USO (US Oil Fund) Nice bounce off support that was expected. It’s still following the pattern of a major bottom. Should hold 9.60, and must hold 9.30. Big resistance at 10.25.
UNG (Natural Gas) Sitting on key support of 6.40. Be patient. Here’s what has been written here for weeks… “Still in a bear trend according to phases. If it has a 30-min Opening Range breakout over 6.75 -6.90 it could indicate a longer-term bottom. The all-time low is 5.78, the weekly base high is 9.80. So the risk is just over a $1 and the first target is just over $2, but if it breaks $10 then $12 is the next stop.”
KOL (Coal) Consolidation day above 10-DMA and multi- year highs Look for support at 14.90-.80 and breakout above 15.45
TAN (Solar Energy) Consolidation day under 22.00 resistance and 21.00 support. That’s all you should focus on.
TLT (iShares 20+ Year Treasuries) Big gap down under the 10-DMA. Today’s low is important to hold. Look for support at 126.73, and 126.40. Resistance at 128.
UUP (Dollar Bull) Nice up day, but needs to clear 24. Important support at 23.
FXI (China) Break out over key 44.40 level. If it can hold over 43.40, the long-term picture looks like an accelerating breakout. Support at 43.40 and 42.75. Next resistance is 46 - 46.50
EWW (Mexico) Trying to hold swing low from mid-August 50-DMA. 55.40 is support it must hold.