First and foremost, my sincere condolences to the families of the victims in today’s attack in London.
Although I use the sky to represent the “wall”, the writing has a similar intention.
“The writing on the wall”, a Biblical story, appears after a King drinks wine from looted vessels seized at a destroyed Temple. An ominous message appears that the days of his Kingdom are numbered.
Admittedly histrionic, my purpose is to illustrate that the skywritten “X” marks the current market’s inflection point.
We have witnessed countless days this year where the indices outperform the overall breadth of the market.
For instance, while the S&P 500 and Nasdaq 100 closed green, gold and the 20+ Year Long Bonds rallied.
Sectors such as Regional Banks, the Financials and Retail struggled.
With no signs of rising inflation on the U.S. horizon, one can surmise that yields fell and gold rose due to a flight to safety.
Utilities, a barometer of investor’s appetite for safety, also gained.
That leaves us squinting into the sun and trying to decipher the meaning of the skywriting.
Is the market drinking its last drops of wine from verboten vessels?
Semiconductors traded inside Tuesday’s range yet well outperformed the indices-something the market has come to expect.
Semi’s (SMH) must hold Monday’s low at 77.80. Likewise, it must retake 79.00.
Biotechnology had a significant role in saving the day. Testing both the 50 daily moving average and the January 6-month calendar range high, IBB hung on.
However, the overhead resistance has become palpable as the fast moving average above slopes negatively. The 50 DMA it bounced from, neutralized in slope.
Retail XRT ticked a few cents below the November 9th low early on. Although XRT bounced back from the lows, it closed shy of yesterday’s closing price
The Russell 2000 (IWM) delivered the clouds in the indices otherwise sunny sky. The chart indicates to sell rallies. What would change that? A move over 136.50.
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