Trading Analysis for 4/21

Mish Schneider | April 20, 2015

Striking how the current trading range in the indices remained as such during our week long vacation. After all, before I left, I did send a reminder that “Everything pretty much continues to trade in a range of its own, chopping around, with the occasional slaughter or clean getaway (until realizing it’s now separated from the herd. Then it finds its way back to the herd or the range).”

I further left you all with, “We see a lot of rotation, but the family basically remains intact, holding each other up in check, not letting anyone stray too far.”

So here we are, back to the Range, Herd, and Modern Family. We strayed, neither for too long nor too far!

Now that earnings season kicks into high gear, I cannot imagine writing anything better to reflect how I continue to see the market for the time being.

However, since I’m rarely at a shortage of words, I will add a few thoughts:
1. Rates -  On April 9th I was interviewed on Benzinga.com and stated that the clear path for the Federal Reserve was to raise the rates, even if it’s just by a bit (which would be logical.)

2. Oil - When asked on that same broadcast what I thought about oil, I told them I thought it was basing-clearly that has been the case.

3. Gold - 114 is the support area I thought should hold. So far it has, which makes me think the double bottom at 110 is good and a move higher from current levels likely.

With the Dow over 18,000 I could go back to the Simpson’s reference regarding Terror at 18,000 in the Dow. (MMMDaily, Treehouse of Horror IV written on 3/30/15). Interestingly, DIA just regained momentum over the January 6-month calendar range high during Monday’s session. That makes Monday’s low 179.15 key support to avoid a new terror at 18,000 and deja vu all over again!

Thanks so much to Geoff Bysshe and Jonathan Griffin for covering while Keith and I had fun in Caribbean!

S&P 500 (SPY) Unconfirmed Phase Change Back to Bullish

Russell 2000 (IWM) We can call 126 pivotal with support down below at the 50 DMA before we say game changer

Dow (DIA) Unconfirmed Phase Change Back to Bullish

Nasdaq (QQQ) Unconfirmed Phase Change Back to Bullish

XLF (Financials) Confirmed warning phase but with an inside day as it seems to await more earnings in this group

KRE (Regional Banks) Inside day. Looks healthy-more like a chop fest til it clears recent highs

SMH (Semiconductors) Confirmed warning phase but did rally just to under the 50 DMA

IYT (Transportation) 158 is the place to clear then it will be really hard to say negative things about the overall market

IBB (Biotechnology) Inside day with 363.63 has to clear now for more bullish flow

XRT (Retail) Inside day and back over the 50 DMA so let’s say more testing the bottom of the range and holding

IYR (Real Estate) This does look like it will visit 75.87 the 200 DMA.

ITB (US Home Construction) Inside day and confirmed warning phase. Housing not where it’s at right now which is probably because of the rate increase possibility

GLD (Gold Trust) Over 115 would take a shot long with a risk under recent lows

GDX (Gold Miners) Once this closes over 20.00, see around a 2-3.00 move up

USO (US Oil Fund) A close over 20.00 this looks really good

OIH (Oil Services) Inside day

XLE (Energy) After the basing action, has follow through with the 200 DMA above looking like its calling its name

TAN (Guggenheim Solar Energy) Now I will wait for a move down to 43.00 since risk/reward is out of whack

TBT (Ultrashort Lehman 20+ Year Treasuries) TLT’s Inside day

UUP (Dollar Bull) Held the 50 DMA at 25.57