With the stock market ignoring any potential bad news, it seems to live in each hopeful moment, like that of a dog.
A dog’s main motivation is treats.
The stock market’s main motivation is also treats-vis-à-vis, bad news means the Federal Reserve will cut rates.
It’s kind of like calling your dog a bad boy, but then he gives you a kiss, so you hand him a treat.
He’s just so darn cute, you cannot help yourself.
Hence, the dog manipulates the owner.
Hence, the market manipulates the investors.
However, both the stock market and the dog have a family.
Some members of that family are not as easily manipulated.
Let’s have a look.
Thursday, I tweeted that this market (macro) is obvious. Forget the S&P 500 and watch the Economic Modern Family.
What do I mean by that?
Only the Semiconductors are over their 50-week moving average (blue line).
And even with that, SMH has not cleared the 100 or 50 DMA on the daily charts. The phase on the daily is caution.
As for the rest, all but Granny Retail XRT, are in strong caution phases. XRT is in a distribution phase or under the 200-WMA (green line).
As for KRE (Regional Banks) or IBB (Biotechnology), best we can say is that they are holding their 200-WMA after trading below them.
Unless IYT (Transportation) and IWM (Russell 2000) change phases or clear those 50-WMAs, we could say this is the tail wagging the dog.
By the way, Raul wants me to tell you that his favorite place to buy treats, chewy.com, goes public tomorrow.
Every Tuesday and Thursday, I will be on KKOB radio at around 6:15 PM mountain time (8:15 PM EST) to discuss markets and market news. https://www.iheart.com/live/770-kkob-5411/
S&P 500 (SPY) – 287.00 the 50-DMA is super pivotal. And must clear 290 once and for all.
Russell 2000 (IWM) – 152.75-153.35 is where the resistance lies. 151.65-the high 2 weeks ago-is pivotal
Dow Jones Industrials (DIA) – 260.06 the ever so important pivotal level.
Nasdaq (QQQ) – 183.59 the 50-DMA it cannot seem to hold above. And, 179.75 support. If breaks look for a move back down to around 175.
KRE (Regional Banks) – 51.40 support. Overhead resistance at 53.50
SMH (Semiconductors) – 105.50 pivotal. 103 key support. 109 resistance.
IYT (Transportation) – Must clear 190 to look good. 186.75 pivotal. 185.50 support.
IBB (Biotechnology) – 103.15 pivotal.
XRT (Retail) – 42.35 the major resistance with now, 41 pivotal and 40.00 big support.
The author may have a position in the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.