July 16, 2018
By Mish Schneider
You ever have a day where there is so much to say, the best decision is to say nothing until the plethora of thoughts process in your brain?
However, that is inconvenient when one writes a daily blog.
So, when I took the photo of the 2 puppies loving each other up, it gave me a plan of what to write about without saying too much.
Here is a short, loving, focused discussion on the breadth, rotation and top down macro picture of the market.
Over the weekend, the quote from Jerome Powell about the worse-case scenario disturbed me.
Today, the dollar declined while the 30 year rates inclined.
The indices were mixed with the modern family sectors flashing some warning signs.
If we, like our pups, are always impetuously ready for action yet also quick to rest, kiss, then play again, what can we expect from here?
Today, some key inflation gauges came out. Those gauges indicate that NY Fed’s Underlying Inflation Gauge (UIG) points to higher CPI and PCE core inflation to come.
If we use that as our backdrop, today, with the dollar decline and rate incline, we can clearly make a case that for that trend to potentially continue. And yes, it plays into Powell’s worse-case scenario.
Nevertheless, the market has a super short-term memory issue when it comes to any bad news.
Thus, although the Russell 2000 (IWM) broke the fast moving average, the Dow held onto 25,000.
Furthermore, the Semiconductors ran right into major resistance before retreating critically close to the support it must hold around 104.
Transportation failed the 200 DMA and went into an unconfirmed Distribution phase.
But here’s the kiss…NASDAQ 100 with Bezos getting bezomay mucho richer, helped keep the Dow and S&P from collapsing.
Netflix (NFLX) could change that, reporting subscriptions below par therefore, collapsing after hours.
Moreover, turns out today’s friskiest pup that has rested but now jumped into action, is the financial sector. The money rotated there. Whether that means anything more than the response to higher rates, remains to be seen.
As far as us older dogs, we have learned patience. Let’s just say, we know that the market is the ultimate alpha.
Wednesday, July 18th at 4 PM EST, I am the kick off speaker for a wealth365 Summit event called “The Ladies of Wall Street.”
I will show you where I’m looking for the next big trade. Plus, show you how you can identify, and methodically profit from, the market’s best trends on your own in the future!
S&P 500 (SPY) 2 inside days. Market paused like the pups. 278.40 the closest support. Then, 277.00. 280.41 March highs. That’s still far from the January highs at 286.63.
Russell 2000 (IWM) This broke the 10 DMA so if can get back over 167.00 better. If not, 164.40 the 50 DMA
Dow (DIA) 250 pivotal
Nasdaq (QQQ) Hanging near the highs but with a bearish engulfing pattern. So, we shall see now that NFLX reported