Enduring Bulls Drink From Water-Bare Succulents
The bulls, at this point, have petrified. They look as though they have died.
Nevertheless, the bulls endure while they suck up whatever green shoots they can optimistically find.
Yet, gold bulls remain relentless.
The Treasury 20 + Year Bonds may be topping out, although with no real conviction for higher rates given today’s mixed Fed statements.
Reduce balance sheet or wait for increased inflation data?
The Russell 2000 stays stubbornly in a warning phase. And, Inflation indicators are indicating low demand for goods.
Perhaps the most optimistic of the major economic sectors, the Transportation ETF (IYT) tested major overhead resistance with the hope of some infrastructure plan.
Succulents require little water to survive.
Are bulls living in drought conditions that will eventually yield a petrified forest landscape?
This week I have focused on Semiconductors. As one of the leading sectors in 2017, SMH embodies the most enthusiastic bulls.
Despite not making new all/time highs on this week's run higher, SMH allows us to pinpoint market sentiment.
Related directly or not, this sentiment influences even our weaker modern family members.
Granny Retail (XRT), on the verge of a major trend-reversal collapse, resurrected through SMH's essence.
Nearly inconceivable yesterday, today XRT puts forth the possibility of triple bottoms. At the very least, the risk is crystal clear should XRT fail.
Semiconductors could petrify however. With typical "safe havens" performing equally well (gold TLTs utilities) the market is hedged and primed to go exponentially higher or lower from here.
Should SMH fail 86.00, our bulls will erode.
I imagine everyone involved in the market asks when the volatile geopolitical situation in the U.S. will negatively outpace the best place for corporations and hedge funds to park their money?
After the lunar eclipse perhaps?
Bottom line: How long can petrified bulls feed off water-starved succulents?
S&P 500 (SPY) 246.45 support. Resistance at 247 since it did not close above there.
Russell 2000 (IWM) Lots of buyers have to come in to get this back above 140 and the 50-DMA. Under 136 trouble
Dow (DIA) Ultimately, 220 is the number to hold
Nasdaq (QQQ) Has to clear 144.30 now on a closing basis and hold 143.50
KRE (Regional Banks) 54.00 major resistance. 51-52 support
SMH (Semiconductors) 88.35 big resistance and 86 closest support. Then there’s the 50 DMA
IYT (Transportation) Tested 170 but then backed away. If cannot get above the 50-DMA soon, good short opportunity
IBB (Biotechnology) 311 the 50-DMA this must clear on a closing basis
XRT (Retail) 38.50 key support to uphold. Inside day which is disappointing.
IYR (Real Estate) Unconfirmed bullish phase. Can’t make up its mind.
XLU (Utilities) 54.63 the last swing high
GLD (Gold Trust) 121 pivotal support. Through 123 even better
SLV (Silver) 16.20 the 200 DMA to clear
GDX (Gold Miners) 22.90 pivotal. Basing
USO (US Oil Fund) Haven’t much to say until this changes phase from Bearish to Recovery on a weekly chart
TAN (Solar Energy) 22.00 resistance and 21.70 nearest support
TLT (iShares 20+ Year Treasuries) I’m looking at that exhaustion gap high to see if this gets close to it or not
UUP (Dollar Bull) 24.20 -24.40 range to break one way or another
FXI (China) Possible exhaustion gap top if cannot get back to 43.20
Disclosure: None.