February 14, 2017
By Mish Schneider
Biotechnology and Regional Banks-2 brothers of the Modern Family-opened their T-Rex Rallysaurus mouths today and roared to new 2017 highs.
Those rumbles stirred but could not shake Transportation through the potential triple tops. IYT closed in the red.
The war-cry barely moved the sloth-like Retail sector back up to the 200 DMA.
Sister Semiconductors, out of earshot, saw the open mouths and yawned in return. SMH also closed in the red.
Inspired by his sons alpha moves, Granddad Russell 2000 held onto its recent gains.
All in all, a better day for the Dow and S&P 500, yet not too shabby for the Modern Family.
Over the millions of years, we know that the T-Rex evolves into the Fire Rooster.
Who presented herself today and took center stage as the latter day version of the T-Rex?
Janet Yellen, today’s fire rooster, testified in front of U.S. lawmakers that the Central Bank still expects to raise interest rates gradually this year.
Wisely, she added her uncertainty by saying, "it's too early to know what policy changes will be put in place or how their economic effects will unfold."
The interest rate yields responded to her more hawkish tone. The U.S. Dollar rose.
So did Silver, Gold, Oil and Sugar-all of which are interesting barometers of inflation on the rise.
Can inflation, interest rates, the dollar, job growth and manufacturing/infrastructure spending all increase simultaneously?
It begins with real change in policy. According to Paul Krugman, “If there’s a WH task force preparing an infrastructure plan, it’s very well hidden.”
Headlines in the WSJ read “Trump’s ‘Stew of Uncertainties’ Puts Hedge-Fund Managers on Alert.”
And each day, the market climbs to new highs regardless.
No wonder the Rallysaurus’ run amock.
S&P 500 (SPY) Yet another new all-time high. 240 not out of the question as a target should it hold over 231 by the end of the month.
Russell 2000 (IWM) Over 138, 140 possible.
Dow (DIA) 20,500 in the Dow-hedge fund managers still seat belted.
Nasdaq (QQQ) Now has nearly 100% reading on the relative strength indicator.
KRE (Regional Banks) New all-time highs with some volume
SMH (Semiconductors) 75.40 pivotal
IYT (Transportation) 171.15 the triple top number to clear. 168 must hold
IBB (Biotechnology) New 2017 highs with 285-287 now pivotal support
XRT (Retail) 43.75 pivotal now that it is back over the 200 DMA
IYR (Real Estate) 79.00 the 200 DMA
GLD (Gold Trust) Looks good over 116
SLV (Silver) Unconfirmed accumulation phase-that means accumulating
USO (US Oil Fund) Sideways action until cash takes out 54.00-then watch it fly
TAN (Solar Energy) Extraordinary bump in volume. Now should hold 18.00
TLT (iShares 20+ Year Treasuries) 118 next test and if clears back over 120 not so bad
UUP (Dollar Bull) 25.80 support 26.20 resistance
FXI (China) Still looks good