September 6, 2017
Mish's Daily
By Geoff Bysshe
She’s back!
Our Modern family’s, Grandma, Retail (XRT) reclaimed the 50-DMA today. Plus, she was the second biggest percent gainer in our sector summary table today. If you’d like to learn more about the Grandma and the modern family click here.
If you have access to MarketGauge’s Triple Play indicators you should take a look at the strength in the price leadership line.
Even without indicators like our Triple Play, the story of XRT bottoming process has followed a very typical pattern as I’ve been chronicling for you here over the last several weeks.
Now for the next test which it has failed twice this year. Can it sustain a meaningful rally over the 50-DMA? This is one to watch going forward.
XRT was big mover in our sector summary table today, but the biggest mover was another sector that has been on the bottom of the table for a while.
The biggest mover today was Energy (XLE). This also moved over its 50-DMA, and like XRT it is rebounding from a major breakdown over the last month.
The down trend in XLE is still very much intact, but for the nimble bottom fisher it may provide an opportunity as long as it stays over 63.30 and its 10-DMA.
Expect to hear more about both of these sectors here in the coming days and weeks.
I many have saved the best for last today….
If you attended our free training last week on explosive trade set ups that often hit their targets in the first day then you should be enthusiastically looking forward to tomorrow, because…
The SPY and QQQ both have the Inside Day pattern I described in that training. Yes the IWM and DIA do too, but they’re not as convincing.
In short, today’s market action was completely inside of yesterday’s range. This consolidation often leads to a trend day IF the market breaks higher.
There’s a lot more to the pattern than just that conclusion, so for a host of other reasons, I’d further narrow my focus down to the QQQ as the best looking one.
However, the key to the market having its next big trend up day will be that the SPY, QQQ and IWM all join in on the move, so make sure you watch for that too.
If you missed the training that covers how to trade inside days, I’ve reopened access to it for tonight and tomorrow here.
S&P 500 (SPY) Inside day. Look for support at 244.60. Resistance at 247.60 and then needs to close well over 248 to get going, and watch the all-time high of 248.91.
Russell 2000 (IWM) Inside day. Warning Phase. Today’s low is important support to hold and then 137.25 and 136.25. Resistance at 139.70 and then 141 and 142.30.
Dow (DIA). Inside day. Support at today’s low then 216.60 and 215.70. Resistance at 219, 219.50 and then 220.
Nasdaq (QQQ) Inside day. Look for support around 143.60 and 142. Resistance is at 145.50, 146 and then the highs at 146.60.
KRE (Regional Banks) Paused after a major breakdown closing under 51. Negative until closes over 52. Maybe support at 50?
SMH (Semiconductors). Inside day at the 10-DMA. Look for support at 87.
IYT (Transportation) Consolidating between the 200 and 50-DMAs Look for support at 166 and resistance at 170.
IBB (Biotechnology) Inside day. Support around 330-328.80
XRT (Retail) Much awaited breakout over the 50-DMA. Let’s see if it holds 40. Resistance around 40.60 and 41.
IYR (Real Estate) Strong in the morning, breaking key level of 81.60, but couldn’t close over it.
XLU (Utilities) Support at 54.40 and 53.60.
GLD (Gold Trust) Consolidation day. Support at 126 and 124 and resistance at 128
GDX (Gold Miners) Closed on under prior day low. Look for support at 24.75, 23.90 and 23.50 Expect resistance at 25.60
SLV (Silver) Consolidation day. Look for support at 16.80 then 16.30-.20. Big resistance at 17.50.
USO (US Oil Fund) Close over 10, but not a trend day. Following the pattern of a major bottom. Look for support at 9.90 and then 9.67, and must hold 9.30. Big resistance at 10 at 10.25.
UNG (Natural Gas) Be patient. Here’s what has been written here for weeks… “Still in a bear trend according to phases. If it has a 30-min Opening Range breakout over 6.75 it could indicate a multi-week bottom. The all-time low is 5.78, the weekly base high is 9.80. So the risk is just over a $1 and the first target is just over $2, but if it breaks $10 then $12 is the next stop.”
KOL (Coal) Consolidation day near 10-DMA. Look for support at 14.90-.80.
TAN (Solar Energy) Consolidation day under 22.00 resistance and 21.00 support. That’s all you should focus on.
TLT (iShares 20+ Year Treasuries) Sizable pullback from Tuesday, but closed in support around 128. Friday’s low (127.69)is pivotal for the bull move that began in early July. Gap fills at 129.60.
UUP (Dollar Bull) Look at your weekly charts for any close over a prior week’s high that is over 24.20. 23.81 is the major low.
FXI (China) If it can hold over 43.40, the long-term picture is beginning to look like an accelerating breakout. Support at 43.40 and 42.75. Next resistance is 46 - 46.50
EWW (Mexico) Consolidated after an ugly breakdown under 56 and 50-DMA. Today’s low is at important swing low. Needs to hold to here.
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