February 15, 2017
By Mish Schneider
A whole lotta clucking going on.
Yesterday, 2 brothers often in conflict, stood together.
Big Brother Biotechnology and Prodigal Son Regional Banks, in their first real signs of feistiness since this rally began, made intentions known to the others in the Modern Family coop.
As fire roosters hormonally charged, they flambloyantly danced to get the chickens’ attention. Maybe Valentine’s Day had something to do with it.
To get lucky, a Rooster will take a sudden and clumsy leap onto a chicken’s back and balance himself with one foot on either of her shoulders.
Today’s love sessions finally shook Transportation through the triple tops and onto new highs.
The Roosters’ consummation moved the Retail sector back over the 200 DMA.
In the excitement, Sister Semiconductors matched her all-time high.
Even more inspired by his sons alpha moves, Granddad Russell 2000 also rallied to new all-time highs.
Is this rally starting to feel like The Year of the Fire Rooster Porn?
The interest rate yields continued to rise. The U.S. Dollar declined slightly.
Silver, Gold, Sugar, Corn, Wheat, and Soybeans gained. All, barometers of inflation, these commodities found statistical support with the latest PPI prices. Up .6% in Janauary, that’s the largest spike in 20 months.
Oil however, remains in a holding pattern. If oil clears $54.00 a barrel, I expect that price will rise like a bubbling crude.
But back to our stud Roosters.
Should Biotechnology (IBB) find its way over 300, that would take it over a significant monthly moving average. Furthermore, that would return the price to levels not seen since 2015.
Should 300 turn out a buzz kill, then expect Big Brother to take a fairly long siesta.
Regional Banks (KRE) have more potential, especially given their Prodigal Son nature. Prone to extravagance, banks left unchecked, could eventually send KRE home asking IWM and XRT for forgiveness.
On that note, it's not uncommon for a rooster to mate between 10 and 30 times each day. However, unless there are 8 to 10 hens for each rooster to ensure the rooster can divide his time adequately, hens will experience unnecessary stress.
At these frothy levels of exuberance, especially since these prices have not been supported with voluptous volume, always wise to look for signs of stress.
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) Got close to 140. Waiting for another push then will see how that channel top works out as a potential sign of stress.
Dow (DIA) 20,600 in the Dow. Remember, if you need oxygen, put your mask on first, then help others.
Nasdaq (QQQ) 99.95% reading on the relative strength indicator.
KRE (Regional Banks) New all-time highs with lighter volume
SMH (Semiconductors) Light volume on this move to new all-time highs
IYT (Transportation) 171.15 now number to hold as this goes to new highs on light volume.
IBB (Biotechnology) New 2017 highs with 285-287 now pivotal support. Better volume but not the blowout kind.
XRT (Retail) 43.75 pivotal now that it is back over the 200 DMA. 44.55 resistance.
IYR (Real Estate) 79.00 the 200 DMA
GLD (Gold Trust) Could be ready for another leg up
SLV (Silver) Confirmed accumulation phase, now over 17.00. And an inside day
USO (US Oil Fund) Sideways action until cash takes out 54.00-then watch it fly
TAN (Solar Energy) Another day of an 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 26.25 resistance
FXI (China) Big resistance at 39.25 area