November 9, 2017
By Mish Schneider
In just one day, I saw three completely different analyses on the market.
First, Grantham said that he does not foresee a bubble.
Rather, he sees low yields and a time correction.
Secondly, analysts like Chris Ciovacco say that NASDAQ just broke out of a 20-year consolidation.
Bullish sentiment suggests the market will explode higher in the next 8-10 years offering a rare generational opportunity.
Furthermore, these analysts are looking for a final stage of euphoria where bears finally throw in the towel and buy.
Bill Gross of Janus Henderson Global says that “all markets are increasingly at risk.”
He, along with others, believe that productivity will decrease, and the market will take a very nasty turn.
I can wrap my head around Grantham’s and Gross’ predictions.
As a technical analyst, I have my own predictions based on the topics I have covered in my Daily’s-stagnation, declining transportation sector, IWM (Russell 2000) possibly failing a monthly channel top.
Regional Banks now in Distribution.
A lagging Biotech sector where specs often go to buy.
And finally, a horrific brick and mortar retail forecast.
What I am trying to reckon with is, exactly what will make bears so happy as to start buying with wild abandon?
A quick review:
A promise of infrastructure spending to rebuild roads, bridges, etc. Unless I missed something, I have yet to see any tangible plan.
Should one emerge, maybe euphoria a bit strong, but a confidence booster, yes.
Tax Reform-chopping corporate tax rate from 35 to 20%. However, not until 2019. Nothing at all will change in the world or country by then. Right?
The plan also covers tax brackets, doubling standard deductions, eliminating federal deductions for state and local taxes, increasing the child tax credit and doubling the exemption of the estate tax.
Nevertheless, it may not pass the Senate.
Health Care-off the table?
North Korea-hawkish talk continues
Low unemployment, but hardly any wage increase over the last few years. That doesn’t bode well if inflation picks up, rates go higher, and oil continues to rally.
The Russian investigation-unresolved.
Bottom line, if you don’t want to wind up naked and in the dirt, watch the Modern Family-and the phases. They are your best analysts.
S&P 500 (SPY) 258 pivotal support. Held the 10 DMA
Russell 2000 (IWM) 147 pivotal as this holds on to the 50 DMA in the clutch
Dow (DIA) 234.56 the 10-DMA held again in the final hour
Nasdaq (QQQ) Saved itself by holding the 10 DMA and preventing a reversal candle from happening
KRE (Regional Banks) Unconfirmed Distribution phase. 54.80 key weekly support should this hold or fail
SMH (Semiconductors) Gapped lower after 3 shooting stars. But, it held the 10 DMA-needs confirmation on that reversal
IYT (Transportation) 168.45 KEY!
IBB (Biotechnology) 310 pivotal
XRT (Retail) That Granny knows how to work an oxygen tank-reversal actually confirmed. 40.50 in focus
IYR (Real Estate) Support at 82.00
XLU (Utilities) outperforming
GLD (Gold Trust) Closed over 122. One more should be good
SLV (Silver) Like to see this clear 16.30
GDX (Gold Miners) Needs to clear 23.10 with volume
USO (US Oil Fund) 10.80 support
XOP (Oil & Gas Exploration) Cleared 35.52 the 50-week MA, which is a good risk point
TAN (Solar Energy) 24.30 pivotal on a closing basis
TLT (iShares 20+ Year Treasuries) 125.50 pivotal
UUP (Dollar Bull) 24.37 the 200-week MA and 24.80 resistance
SOYB (Soybeans) One push more will clear the 50-week MA