A: Probably not, MarktWatch, if you keep putting headlines like this on page 1 every time the market takes a hiccup. Click the graphic for the article.
It would be totally normal – even expected – for the market to get a good drubbing into the July time frame. But much though I abhor the policy that has created and sustained this thing, said drubbing might only quiet down the interest rate hike talk and cement an even longer run for ZIRP.
We just don’t know. Meanwhile, the market has not even decided yet on the answer to its ‘manic melt up and termination or hard correction prior to new highs?’ question. Here is the daily SOX (our leading index gauge) for perspective…
Well on top of a really good (and notable) day in the precious metals, I got a bonus in that BBRY exceeded whatever bombed out expectation Wall Street had for it. This is one I have been sitting on for the okay chart pattern and also (hat tip time) the fundamental research of Citron, which was very helpful to me and is linked over there on the right side bar. I think I hat tipped Citron once before in helping firm my resolve to short the hell out of 3D Systems (DDD). So you can consider this a hearty recommendation of Andrew Left’s analysis.
Why it’s the Utilities breaking out of a Symmetrical Triangle that was noted in NFTRH 295, although I had no idea it would break out so soon. The Utes seem to think interest rates are going to drop, although the bouncing banks seem to think they will rise. Screwy market, eh?
If the Utilities are right, then there is another index that looks interesting as well. Here’s the weekly chart of the Homies in a Cup & Handle, having broken the Handle.
The Emerging Markets ETF has been tracked in NFTRH and for the last several months, during its ongoing bounce. I am and have been long EMF, my preferred fund for EM’s. The critical resistance is as noted after a nice trend line break.
The Semiconductor index is creeping up the top of its daily Bollinger Band and is over bought…
…and creeping up the top of its weekly Bollinger Band and is over bought…
Could the over bought Semiconductor index finally break its amazing string of green days? This leader got way ahead of itself as casino patrons got excited and got with our breakout plan. 590 looks doable if this thing does roll.
While on a mini selling spree we’ll add Cohu to the list of items providing now-realized gains. This back end Semiconductor play is in the books off a buy per this post. Hey, taking profits is fun. Especially in this market where things are getting rotated, washed, rinsed and repeated with such regularity. There is always another trade or speculation out there.
This is the one I happened to be holding at the end of last year as a tax loss/January effect seasonal play. It got material news and launched from the 13′s to 30+ in a day and has been traded fairly well ever since. OncoMed has been noted in NFTRH as a “lottery ticket” hold over the last several weeks and today I am taking the 14% off the little bottoming pattern, which by the way, measures to 26+.
This is not an NFTRH+ trade because it was too speculative. Just a personal thing.
The Russell 2000 is getting on the party bus today, finally breaking above the SMA 50 and trying to take out a pattern neckline. Further, RSI is above 50 (I am going to try adding moving averages to RSI as a trend confirmer, i.e. EMA 20 above 50). AROON is green, which means the daily chart is in an uptrend.
Last year I came up with a target of 2192 on the S&P 500 and 1380 (if I recall correctly) on the RUT based on big picture monthly charts. Did I have full belief in them? No, not really. But they are coming ever closer to being realistic.
Look, I don’t want to start talking crazy talk, but are policy makers the world over not trying to stimulate and maintain speculation? Is the RUT not a speculative momentum leader? All I can tell you is that this 2014 market is going to be an interesting one. Feels like 1999.
Frankly, by daily charts I think the Semiconductor index and several other US markets are too far above the 50 day moving averages and soon due for a breather. But a big picture signal we first noted in March continues apace. That would be the SOX similarity (Bollinger Band creep) to its state in 1999.
Per the chart’s question, SOX did indeed close March (and April and May) above decade-old resistance and it continues to creep up along the top B Band. This and the Tranny can be considered Gate Keepers to the potential for a manic market blow off.