Baffling, as beyond this sign is a shear 600 foot drop into the canyon below. Doesn’t that make you wonder what sort of authorized guide they recommend visitors follow?
Not so different than the market action. Speculators feel prohibited from entering both the long and the short side. Recent volume patterns, or how committed speculators are to investing, indicate a lack of confidence.
Even with an “authorized guide†in the form of NASDAQ and FANG stocks, stock market visitors have mainly stayed out of the park.
The strong dollar has had its impact. Likewise, so has the talk of the Fed raising interest rates.
Equities on the highs- Amazon (AMZN), Google (GOOGL), Facebook (FB) and Netflix (NFLX) look fat and happy. With earnings coming up in three of the four, those trades now have too much inherent risk.
So what’s a trader to do? Ignore the warning sign and traverse beyond the point wearing a wingsuit and saying a prayer? Do what we did – walk to the edge, take a photo and then head back to the safety of the car?
For nearly two months, we have tracked the Modern Family members noting their divergence.
This week begins no less divergent. Our leaders, Semiconductors, Transportation and Regional Banks have bullish phases. Regional Banks made a new 2016 high early on in the session. Perhaps the next big mover, KRE at least shows more promise than the rest.
Semiconductors SMH and Transportation IYT, still have topping reversal patterns in place. So yes, impressive but they need more.
Granddad Russell 2000 bounced off of support levels, which is encouraging. However, the overhead 50 DMA looms as resistance keeping IWM in a warning phase.
Retail, in a distribution phase, at least hasn’t jumped or fallen from a cliff. As of Friday’s action, the possibility of a reversal, albeit a very low volume one, looks reasonable. Tomorrow should provide us with more evidence on which way Granny plans to turn.
Biotechnology IBB, hiked up to the warning sign and opened the fence door. IBB will jump into the abyss should it have a weekly close under the 200 week moving average.
