February 17, 2014
By Mish Schneider
Quote: George W. Bush
As the East Coast of the US snaps up local hardware store’s supply of Ice Melt, Wall Street prepares for a Melt Up!
With last week’s stunning conclusion on ok but not amazing volume, irrational exuberance has yet to show itself. Bears, on the other hand, after their recent premature exit from hibernation, should be safely back in their caves for perhaps another few weeks.
Tops, like bottoms, tend to be dramatic. Therefore, I am anticipating more upside with the distinct possibility the market experiences (hard to pinpoint when) another run up to new highs with much more exuberance in volume.
A blow off rally could bring in the sucker bets. That could easily spell the peak of the market for 2104. But surely I speculate this fine Presidents Day for as we all know by now, the market tells the astute what to do when.
In the meantime, enjoy the ride. A few caveats-again-Retail, the Dow and Small Caps. After new highs in NASDAQ, they all (with Retail in particular) have some catching up to do big time.
S&P 500 (SPY) A short trip left to 184.94 the 2014 highs. 181.15 the 50 DMA now comfortably in the rear view mirror.
Russell 2000 (IWM) Not so comfortably far from the 50 DMA therefore we start this shorter week looking for 113.15 to hold with 114 pivotal and possibly the place to launch higher from.
Dow (DIA) 160.75 super close as the line in the sand 50 DMA. This really needs to muster steam from these levels seeing162.50 as the next overhead point to clear
Nasdaq (QQQ) New highs, overbought, but low volume suggests this could be jogging and not sprinting to its peak top
XLF (Financials) Another sector that has to maintain last Fridays lows to keep the picture roseate.
SMH (Semiconductors) Looking more like Biotech strong!
IYT (Transportation) Confirmed the bull phase and now like the others, needs to clear away from the 50 DMA
IBB (Biotechnology) Took a bit of rest near new highs-might be tired, might be
XRT (Retail) Inside day under the 50 DMA making this the PLACE to watch for a move over the 200 DMA or bust
IYR (Real Estate) That base turned out to make this now a top performer in 2014 relative to its weaker 2013 chart
XHB (Homebuilders) It seems any dip is a good buy opportunity
GLD Cleared the 200 DMA, first time since exactly one year ago.
USO (US Oil Fund) Hovering on the 200 DMA and also, needs to show it can clear or will have issues
OIH (Oil Services) Confirmed bull phase
XLE (Energy) Big day to close over the 50 DMA-watch to see if it holds here
XOP (Oil and Gas Exploration) Approaching resistance from mid-January
TBT (Ultrashort Lehman 20+ Year Treasuries) 2 doji days which means watch the direction after the pause and follow
PHO (Power Shares Water Resources) Very near the highs 26.41
EEM (Emerging Markets) Ran to the 50 DMA. If this rolls over, could be a good low risk short opportunity.
KRE (Regional Banks) A relative lagger.
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