Market Analysis for Trading on 8/10/2015

Mish Schneider | August 10, 2015

August Heat-A Short Story

W.F. Harvey

Five Top Picks To Park Your Money This Week

Where should we look now, for the best place to park money this week should the below instruments open up intact on Monday?

In no particular order, let’s begin with Semiconductors. Naturally, as part of my Modern Family, I have a penchant for Semis. The 3 lows last week at 51.00 ending with an inside day (the range of Friday traded within Thursday’s trading range), and the green close while the four indices deteriorated, has my attention. Furthermore, some of the big Semi names held up well.

Real Estate (IYR) and several instruments in that sector outperformed. I wrote a lot about the bottoming formation and the return to a Recovery Phase after a substantial amount of time in a Bearish Phase. I like to look at the cycles of phases, especially when the phases improve rather than disintegrate as in the case of the Dow.

Solar Energy (TAN). It closed like poo, but that’s what has my attention. I noted that I was waiting for new recent lows. A caveat is that it is still above the 2015 low. If cannot break down there and begins to reverse from Friday’s low, you have a viable risk.

Natural Gas (UNG). There’s a lot of buzz about domestic energy production capacity dropping. With that, Friday was an inside day and the instrument defended the 50 DMA (Recovery Phase that turned bearish a year ago so a cycle up would make perfect sense.)

Mexico (EWW). Perhaps it’s divine intervention given how much political hoopla there’s been. The ETF is in a bear phase since last December, acting well as if it could be bottoming and offers traders a decent risk.

Surprised? No Modern Family, Sheep, Octopus or Ocean Floors-just good old fashioned technical analysis I hope gives you some direction during the August heat.
Below find a few more potential setups:

S&P 500 (SPY) Confirmed warning phase. 204.11 the July low with 207.30 the 200 DMA and 210 resistance Subscribers: Negative Pivots in all

Russell 2000 (IWM) Anything is possible since 120 is a pivotal area. However, lots of damage done using calendar ranges and phases-this is now confirmed in a distribution phase

Dow (DIA) 174.44 is the July 6-month calendar range low now resistance. Plus, this is heading for a death cross.

Nasdaq (QQQ) Miraculously held the 50 DMA. Hard to stay angry at the market when the top 100 stocks aren’t ready to quit yet

XLF (Financials) 25.35 point to clear with 24.94 point to hold-also in a bullish phase

KRE (Regional Banks) Confirmed warning phase. Has support at 42.75 level and if can clear over 44.08 will be good

SMH (Semiconductors) Held 51.00 really well and over 52.00 gets interesting

IYT (Transportation) Broke the 50 DMA and back into an unconfirmed bearish phase-still like it though especially over 148.82

IBB (Biotechnology) The best news is that it held the July 6-month calendar range low. Friday’s low if holds could see a bounce back to 375.

XRT (Retail) Unconfirmed distribution phase. Granny not at the July low though

IYR (Real Estate) Through 75.20 area will be hard to resist

XHB (US HomeBuilders) 36.66 support inside day and a bullish phase

GLD (Gold Trust) Still staying clear

SLV (Silver) Looks better than GLD

GDX (Gold Miners) Almost got interesting but still very weak

USO (US Oil Fund) Yet another new 2015 low-watch out when this has bounce

OIH (Oil Services) Didn’t end the week as excitingly as it should have

XLE (Energy) Failed the possible reversal

UNG (US NatGas Fund) If holds of 13.00 ok to still watch and like over 13.75

TAN (Guggenheim Solar Energy) Got our new low of the recent down move. The 2015 low is 31.77 which is now the risk point should this reverse

TLT (iShares 20+ Year Treasuries) Touched 124.40 the 200 DMA resistance-doesn’t seem to believe the Fed will raise rates. I still believe they will

UUP (Dollar Bull) Possible pull back in the works with a new 60+ day high and sell off

EWW (Mexico) Risk if good is to Friday’s low

EWI (Italy) 15.63 July high to clear

FXI (China Large Cap Fund) 40.00 pivotal

CORN (Corn) Trying to hold here over 23.00

JO (Coffee) At the 50 DMA