Hedging

May 15, 2018

Mish's Daily

By Mish Schneider


With one foot in the water, and the other on the sand, she reminds me of the current market.

Get wet?

Head for the lounge chair?

Get dressed and call it a day?

The phases in the indices are all bullish.

One reason to jump in the water.

Besides the Russell 2000, Semiconductors, Retail, Regional Banks and Transportation are also in bullish phases.

The holdout sitting on the lounge chair is Biotechnology (IBB).

IBB broke under the 50 DMA for an unconfirmed bearish phase.

With the stronger dollar, firmer rates, and higher oil prices, we still want to go swimming, but for now, only with a life guard nearby.

What will change that?

The Russell 2000, should it clear back over 160.00 level, I would consider that healthy.

NASDAQ, (QQQ) needs to hold 166.50 and get itself back over 169.50.

Transportation (IYT) has to hold 188. In order to get us head deep in the water, it has to clear 195.

Semiconductors (SMH), has to hold 104. Then, a move over 107.25 would be considered very bullish.

Granny Retail (XRT), in the throes of lots of earnings reports, over 46.00 looks enticing.

But, even with the technical points, there are sharks in the water.

Or, what I call putting out the fire with gasoline.

So, as the market hedges, you do the same.

And watch those sharks. You know the ones-they have name tags on them.

Besides, rates, the dollar and oil, there’s the shark called North Korea, one called the Middle East, and perhaps the most dangerous one we nicknamed “Jaws,” Russia.

S&P 500 (SPY) The tinderbox of issues in the geopolitical world could ignite at any time, so 267-268 is max risk here. 270 pivotal.

Russell 2000 (IWM) 158 pivotal support which if fails, would give bears a low risk opportunity to short against the highs. Should it clear and hold over 160, a $10 move up is not out of the question

Dow (DIA) Who can forget Terror at 25,000 in the Dow? Not me-so that’s the resistance (250) with now 245 support to hold

Nasdaq (QQQ) Didn’t quite fill the gap to 170.93 left on 3/17. Yesterday high 170.82-so that’s not the healthiest sign. 166.50 needs to hold with 169.50 pivotal

Learn How a Successful Hedge Fund Manager
Capitalizes on Market Swings

Swing Trading eBook
  • How To Understand (And Trade) Current Market Phases
  • The Most Profitable Time to Trade a Trend
  • How To Overcome Big Losses And Create Consistent Returns
  • How To Define Entry And Exit Rules For Maximum Profit

Leave a Comment or Reply

Your email address will not be published. Required fields are marked *