Market Analysis for Trading on 7/14/2015

Mish Schneider | July 13, 2015

Last week I wrote a lot about the logic of this year’s trends specifically referring to the Russell 2000 as Granddad and leader of our exultant Modern Family.

The idea stemmed from Granddad’s Prodigal Son, Regional Banks, (KRE) as after the recent substantial correction to support, thinking logically as a leading sector, how it held that support and was first to continue its ascent.

On July 9th I gave a vote of confidence to logic prevailing over fear.  That led to the assumption that If KRE and IWM came first, logic would also dictate that the rest of the Family (Biotechnology, Retail, Transportation and Semiconductors), would follow in kind.

Last week, all indices remained in warning phases. In the sectors, Retail, Biotechnology and Regional Banks 3/5 of the siblings were in Bullish Phases.

To begin this week, NASDAQ and of course, Grandpa Russell 2000 (IWM), crossed the 50 DMAs and are in unconfirmed bullish phases. That leaves the S&P 500 and the Dow now marginally under their 50 DMAs.

Transportation gapped higher with resistance at 151, which is its 50 DMA. More importantly, was the support it found over 145.00 on the longer term charts. Semiconductors have more work to do, but key factor for now, was the test and hold of 2015 lows.

With 18,000 in the DJIA that elusive gremlin that has spooked the Bart Simpsons of the media and investor world by hanging off the side of the school bus, (Treehouse of Horror IV published 3/29/15) that number should provide some psychological respite for the haunted.

Reason itself is fallible, and this fallibility must find a place in our logic.  Nicola Abbagnano

S&P 500 (SPY) Support at 208 and 210.13 is the 50 DMA

Russell 2000 (IWM) Gap over the 50 DMA and didn’t look back. 124.75 key support to hold

Dow (DIA) 179.64 the 50 DMA. Talk about a 2015 trading range-remember sheep?

Nasdaq (QQQ) Cleared the 50 DMA which now must hold-109.00

Volatility Index (VIX) Gapped back down under the 50, 100 and 200 DMAs.

XLF (Financials) Lots of banks report this week. 24.74 is the 50 DMA to hold

KRE (Regional Banks) 45.00 next resistance to clear with support at 43.95

SMH (Semiconductors) Over 53.15 much better but over 53.63 is the real point to look at for a reversal.

IBB (Biotechnology) Big Bro near the 2015 highs!

XRT (Retail) Granny is over 100 and approaching 102

IYR (Real Estate) 74.50 the 50 DMA resistance overhead

XHB (US HomeBuilders) Another one approaching 2015 highs

GLD (Gold Trust) 111.70 next point or resistance if we are to assume this will not break the 2015 lows

SLV (Silver) Held the key point for the island bottom

USO (US Oil Fund) 18.00 is the number to clear otherwise either digesting or could have more downside

UNG (US NatGas Fund) Cleared the 50 DMA

TAN (Guggenheim Solar Energy) 37.50 resistance

TLT (iShares 20+ Year Treasuries) Near 2015 lows with Beige book this week

UUP (Dollar Bull) support at 25.00

CORN (Corn) From basing to momentum

BAL (Cotton) Basing

SGG (Sugar) Basing and predict worst is over