August 4, 2019
By Mish Schneider
Our emcee now, however, is the adorned bear.
Oh yeah, he’s alive and well and ruling the market.
Now I rule the world and now, I'm on top
And I'm rollin' with folks that could never be stopped
And I'm here to let you know this is where I belong
And to you sucker emcees that sing my song
Will the bear’s reign turn out ephemeral?
We started out this past week with four of the six economic Modern Family members in bullish phases.
We ended the week with 3 members in bearish phases, one in a warning phase and 2 still hanging tough in their bullish phases.
Does that mean that the Bears rule the market, or are they merely rulers for a day?
The phases listed above are those on the Daily charts. What I show here are the weekly charts.
I like to use those charts for a better step back on the macro.
On the top left chart we have our Granddad Russell 2000 IWM.
After one week closing above the 50-week MA at 153.77, this week it failed that level.
That puts it back into a weekly caution phase.
Middle top is the Regional Banks or our Prodigal Son KRE. Typical to its name, it started out the week lavishly, but ended the week begging for forgiveness.
It currently sits on the 200-WMA at 51.92. A break below would keep the Bears supreme for the time being.
Top right is Transportation IYT. This too closed under the 50-WMA at 187.91. It joins IWM in a weekly caution phase.
Bottom left is Granny Retail XRT. Watch for the higher lows since December 2018. Should it break that pattern with a weekly close under 39.58, market is doomed.
Middle bottom is Biotechnology IBB. Big Brother could not even get close to clearing the 50-WMA. Too bad that they have not lobbied for marijuana legalization. Friday, many pot stocks rallied, and the ETF MJ, had a legitimate bottoming reversal pattern with better-than-average volume!
Finally, bottom right is Sister Semiconductors. SMH is still in a bullish phase on both the Daily and Weekly MAs. Will it help the others hold and turn back up?
It could easily do the opposite and look around to see itself all alone.
With lots of damage done this past week, we have reduced our exposure big time.
Furthermore, Keith and I are taking our usual August vacation and will not return until August 25th.
In the meantime, Geoff Bysshe, President of MarketGauge will prepare the Daily blog 3 times a week.
I wish you all a successful and healthy next 3 weeks, and leave you with these words from Kurtis Blow,
But now I must go, say goodbye to everybody
Tonight I'll see you all at my Super Dinner Party…
The music started endin', it was time for a speech
The crowd started sittin' as I rose from my feet
And this was once a dream, I explained to the crowd
But now, I rule the world, and I feel, so very proud
Excuse me please, for stoppin' this show
I just had to thank you all, huh, and me so
Russell 2000 (IWM) Held the 200-DMA at 151.22 and failed the 50-DMA at 153.24-use those parameters.
Dow (DIA) 264.84 the 50-DMA
Nasdaq (QQQ) 186.65 the 50 DMA support must hold
KRE (Regional Banks) 52.85 the 50 DMA to clear back above
SMH (Semiconductors) Resistance at 115.75. Support at 109.50
IYT (Transportation) 50-WMA at 188 now super pivotal. 186.50 the 50-DMA it is still holding-key to the market I believe
IBB (Biotechnology) 104 support and 105.60 big resistance at the 50-DMA
XRT (Retail) 42.10 resistance with 40.00 support
Every day you'll be prepared to trade with: