A Classic Bull Market With Skeletons in the Closet

From the private collection of Arnold Lieberman-Art Dealer, Santa Fe, NM

This week, I am coming to you from a little town in Mexico called La Penita.

The market is coming to you from hints by North Korea that they are willing to discuss a nuclear arms agreement.

But that’s not all.

The market also sees a plan for rolling back more bank regulations.

Trump is getting pressure from the Republicans on trade tariffs.

The skeletons though, closeted for now, havent disappeared.

As mentioned over the weekend, “A pattern that has emerged, considering we have a President who makes all of his thoughts known, is trading those thoughts, and then evening up before (if ever) thoughts turn to actions.”

With Mnuchin claiming that Canada could be exempt from the Tariffs, one assumes he speaks for Trump.

With that and the threat of peace in NK, the market firmed again.

As we know though, Trump could change his mind on Tariffs, NK or anything for that matter.

So, we must prepare for skeletons.

How?

Today, the Russell 2000 (IWM) went into an unconfirmed Bullish Phase.

One possibility is that IWM confirms. It still has to clear 156.

Another possibility is that is does not confirm. Trouble, especially back under 154.

Transportation (IYT) and Retail (XRT) are still in warning phases.

It is possible they will catch up. If not, also possible they both break down further and take the steam out of IWM.

NASDAQ 100, could fail 167.50-168. If it does, as the market leader, another skeleton. If holds and clears 170, Marilyn Monroe.

Even more indicative of beauty or the beast within, the interest rates and US dollar scenario.

UUP, the US Dollar ETF, failed the long-term monthly support. Further weakness should be noted. Especially, since the metals and other commodities seem ripe for takeoff.

The interest rates did not do much. However, the Fed has signaled the need to raise some more.

That puts the market back to watching a weaker dollar and higher rates. Orderly for now, yet should that change, prepare for a shift to gold and away from equities.

Finally, watch DBC, the ETF for the Commodity Index Tracking Fund. Like Marilyn, it will look awfully sexy over the 200 week moving average, which will be the first time that has cleared since the Spring of 2013.

That beauty could bring out another skeleton-inflation.

So yes, we love Marilyn Monroe. But her life ended tragically.

Let’s hope for the best. Nonetheless, as I have pounded into you nearly everyday, the dollar and rates-beauty and the beast-could be coming to a theater near you.

S&P 500 (SPY) 268.00-268.50 big support. 272 pivotal and 275 significant resistance. Bottom line, unless this clears 275, the highs are getting lower.

Russell 2000 (IWM) 152 huge support. 154 pivtol and 156 resistance. Needs a second close over the 50 DMA to confirm the bullish phase.

Dow (DIA) Big Blue weak link-still in warning phase unless we get two closes over 252.70.

Nasdaq (QQQ) 168 pivotal. 163.50 the 50 DMA. And must clear back over 170 if good