Market Analysis for Trading on 7/9/2015

Mish Schneider | July 8, 2015

“The Thorns Are Lovely This Year”

Morticia Addams

Although the Addams Family (the popular and way too short-lived 1964 American TV Series) thought themselves and their tastes shared by most of society, in actuality and what made them so funny was their culture clash with the rest of the world.

Our Modern Family has had similarities in that as most global economies have well underperformed, last month and up until this week, several sectors of the US market had rocketed to new highs.

What now for our clan?

Granddad Russell 2000 (IWM) in a confirmed warning phase, has 2 distinct possibilities. First, to hit the 200 DMA, get way oversold and begin the bounce back as that also keeps it above the 2015 trading range lows. Second, to go the way of its weaker spawns, Transportation (IYT) and now Semiconductors (SMH), the former in a Bearish Phase and the latter in a Distribution Phase.

Grandma Retail (XRT), had an inside day after Tuesday’s spectacular comeback. However, under the 50 DMA yet above the May lows significantly as this point, Retail either needs to show leadership pronto and return over 99.50 or 96.00, the 200 DMA is next up (or down).

Prodigal Son Regional Banks (KRE) over 40.00 took out its yearlong consolidation form 2014 yet with pressure of the overall market, closed for the first time under the 50 DMA since the one day it also did so back on May 1st. KRE has to get back over 43.10 lickety-split or also faces the wrath of the 200 DMA, which ironically would be a return to where it originally broke out from.

Big Bro Biotechnology is fast approaching the 50 DMA as the last of the Family-our Gomez Addams (one who doesn’t seem to regard money as a priority and squanders it in a cavalier manner while remaining wealthy) - to actually be in a Bullish Phase. For now.

Semiconductors (SMH) at this point, we will look for a move down to 50.00 as a level of support, assuming it breaks the 2015 lows 51.84.

Transportation (IYT) is toast unless it demonstrates a dazzling comeback this week over 146.

A recurring theme of many Addams Family episodes was an update on the most-recent visitor to their home. Invariably, as a result of their visit to the Addams', the visitor would be institutionalized, change professions, move out of the country, or suffer some other negative life-changing event.

Behold Greece and China.

The Addams' would always misinterpret the update and see it as good news.

Hence, we and our Modern Family will be on the lookout for the typical signs of a bottom. Until then, we reside at 0001 Cemetery Lane.

S&P 500 (SPY) When all is said and done and for what’s it’s worth, SPY held Tuesday low. However, under the 200 DMA so bears in control. Subscribers: Negative Pivots

Russell 2000 (IWM) May low 120.24 and above 123 better

Dow (DIA) Inside day under the 200 DMA. 176.76 remains the number to clear

Nasdaq (QQQ) Inside day and second test of 106 close to the April lows. The 200 DMA is 104.78

XLF (Financials) Landed on the 200 DMA.

KRE (Regional Banks) As mentioned, this needs to get back over 43.10

SMH (Semiconductors) Second day of huge volume which is clearly liquidation and a possibly a blow off bottom in the works over 2015 lows

IBB (Biotechnology) Holding the 50 DMA-the only one of the family

XRT (Retail) 96.00 underlying support and over 100 this will have new life

IYR (Real Estate) 74.64 the 50 DMA resistance overhead

XHB (US HomeBuilders) Second day it held support and now over 37.00 even better

GLD (Gold Trust) Held 2015 lows, best we can say for now

USO (US Oil Fund) Striking is the volume patterns-massive liquidation which also could mean blow off bottom

TAN (Guggenheim Solar Energy) Ridiculously oversold-Subs-have a plan.

TLT (iShares 20+ Year Treasuries) Over the 50 DMA after dovish FOMC

UUP (Dollar Bull) support at 25.00

FXI (China Large Cap Fund) If there is a logical place to stop falling, the monthly moving average retested Wednesday is it