August 6, 2017
By Mish Schneider
We got bullish faces. We got warning faces. We got bearish faces.
We even got two-faced faces-half bullish, half warning.
We also got Hopeful Faces in Recovery Phases.
Bullish Faces: The Dow, the S&P 500, Regional Banks, Biotechnology, Gold, Solar Energy.
Warning Faces: The Russell 2000, Transportation.
Bearish Faces: Silver, Grains, the U.S. Dollar.
Two-Faced Faces: Semiconductors, NASDAQ, 20+ Year Long Bonds.
Hopeful Faces: Energy, Oil, Retail (Brick and Mortar).
Happy are the blue chips and Fortune 500 companies. Yet so is Gold and Solar.
Grimaced are the Small Caps and Trans.
Interest Rate yields--or the face of the Federal Reserve? More grimaced than hopeful?
Sad are the inflationary indicators, especially the agricultural commodities.
Hopeful are the energy stocks. So, after the improved jobs number, is Granny Retail.
Which Face should we traders and investors believe?
Looking at the market through the Fed’s face, I see why their near-term monetary policy grimaces.
After all, the Dow has made new all-time highs 8 days in a row!
That should encourage the Fed to put on a happy face and stick to the plan of reducing their balance sheet.
On the other hand, with Granddad Russell and Transportation in warning phases, if you buy into my Modern Family theory as best gauges of the U.S. economy, those two give the Fed pause.
Two-faced are the Semiconductors.
As per the analysis on why Sister Semiconductors makes the Modern Family cut, we need to see speculators buying those 25 U.S. based tech companies.
Last Friday, Semiconductors returned over the 50 DMA and went back to an unconfirmed bullish phase. Talk about speaking out of both sides of ones’ mouth!
The conundrum for the Fed (and what makes them sad) is the inflationary numbers.
Or better said, the lack thereof.
Hopefully though, the hopeful signs hang tough.
Energy stocks rallied. Two I have been watching, PBF Energy (PBF) and Newfield Exploration (NFX), look as though they are basing. Same with the U.S. Oil Fund (USO).
Resuscitation Granny Retail (XRT) closed the week out over the pivotal 41.00 level.
By Friday the 20+ Year Treasury Bonds confirmed a bullish phase, yet closed down on the same day. That tells me the Fed ain’t feelin’ it (confidence) yet.
“What you see is only half of what I am. I have a hundred different faces, a million different personalities. Only a part of me is what I show you. I display a fraction of my true self. Everything is just a façade. It’s not the truth of me. You don’t know me. You never will.” Unknown
S&P 500 (SPY) 248-245.68 range to break one way or another
Russell 2000 (IWM) 140 majorly pivotal.
Dow (DIA) Amazingly, yet another new all-time high
Nasdaq (QQQ) 140.80 support if cannot get back over 144
KRE (Regional Banks) 54.25 pivotal support
SMH (Semiconductors) 85.54 the 50-DMA
IYT (Transportation) Cleared 166.50 so now pivotal and if holds, some relief possible til it gets to 169.75
IBB (Biotechnology) 308.50 major support with 322 the place to clear
XRT (Retail) 40.40 support 41.00 pivotal
IYR (Real Estate) Like to see this hold 80.00
XLU (Utilities) 54.00 good place for this to clear and 53.00 to hold
GLD (Gold Trust) 119 50 DMA support
SLV (Silver) 15.25 support. Over 16 looks good
GDX (Gold Miners) Like to see 22.00 hold
USO (US Oil Fund) 10.00 pivotal. 10.60 big resistance to clear
TAN (Solar Energy) 21.65 pivotal. Through 21.85 great.
TLT (iShares 20+ Year Treasuries) Cleared 124.86 the 50 DMA for a confirmed bullish phase
UUP (Dollar Bull) Returned over the 200-week moving average at 24.20. Could see more dollar run