Recently, we spent a long time observing Orangutans at the zoo.
Interestingly, humans and Orangutans share nearly 97% of the same DNA. That makes them one of our closest relatives.
Unlike humans, Orangutans’ arms stretch out longer than their bodies.
This reminds me of the bulls in the current stock market.
It seems to me, that the bull’s arms have stretched out longer than the body of the market.
Despite that at any given moment the stock market could have a significant sell-off, the bulls remain steadfast.
Bulls are hanging from the trees, swinging from branch to branch.
Yet, I wonder how long it will be before even the loud howls and bellows of the bulls are met with a trip to the endangered species list?
Over the weekend, we covered the Regional Banks ETF (KRE), or what I call the Prodigal Son of the Modern Family.
As of last Friday, KRE had rallied nearly to the tick, to the 200-WMA at 50.25.
Today, KRE cleared the 200-WMA and the 50.25 level.
However, the lack of follow-through in the indices and all of the other Modern Family members except Transportation IYT, is noteworthy.
The Russell 2000 (IWM), still has to clear 145 and the 50-DMA to improve in phase from Bearish to Recuperation.
Semiconductors (SMH), which did clear the 50-DMA on Friday, needed to confirm that move today. It did not.
Rather, SMH broke back down below the 50-DMA and went back into an unconfirmed Bearish phase.
The S&P 500 (SPY) opened lower, and never recaptured its floor trader midpoints.
Remember, weekly charts are best when the price closes the week above/below the key levels noted. There’s a whole lot of time before Friday. If KRE cannot close the week over 50.25, you will be duly warned.
Orangutans’ future is bleak because of illegal logging, poaching, fires, and severe drought.
Bulls’ future could also be bleak because of the government shutdown, debt, rising interest rates, weakening dollar, lower oil prices and severe fourth quarter earnings losses.
S&P 500 (SPY) – 259 is pivotal resistance with best underlying support at 255.
Russell 2000 (IWM) – 140 best underlying support and unless this can clear 145, we could see 140 soon.
Dow Jones Industrials (DIA) – 235 pivotal support-244.20 is the negatively sloped 50-DMA
Nasdaq (QQQ) – The 50 DMA at 162.21. Support at 156
KRE (Regional Banks) – It’s all about the weekly close-over 50.25 great. Below, I will consider that a failure into resistance
SMH (Semiconductors) – Now an unconfirmed Bearish phase. Has to confirm with a second close under 91.23
IYT (Transportation) – This still has a long way to go to see the 50 DMA at 179.35. So for now, a close under 170 would not be a good sign
IBB (Biotechnology) – 110 next resistance with 106 closest support
XRT (Retail) – 43.75 the pivotal number still. Above good, below we are looking at 42.25 support. Above we can see the 200-WMA looking at 44.80
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The authors 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.
