Legendary Party Tom Farris Artist

Deer Woman watches as the wolf shares his martini with the water serpent and bison man nurses his.

As Deer Woman takes center stage, this piece becomes relevant as the legendary party the Federal Reserve invited the market to last Friday.

Deer Woman, according to Native-American mythology, may appear as an old woman or beautiful maiden. Men who are lured into her presence become trapped by her magic.

In a dramatic climax to the week, the Federal Reserve, our Deer Woman, became the ultimate trickster.

Whether they raise or lower interest rates, no matter. The perception counted most. The 20+ Year Treasury Long Bonds (which I featured on August 8th in the Daily called “Close Encounters with a Channel of the Technical Kind”), finally gave up the 50 daily moving average and headed into an unconfirmed warning phase.

Janet Yellen, the market Deer Woman, made her appearance from Jackson Hole as the older lady. She took center stage. She clearly trapped bulls with her magic as she seemed to play “good cop, bad cop” with Fed President Fischer.

While Janet spoke of reasons to hike, she also expressed concerns. Fischer came out much more hawkish. So much so, he could have been included as “Hawk Man” in Mr. Farris’ painting.

Some of us did not imbibe spiked martinis during Fed speak. Instead, those of us dressed as “Little ‘Red’ Riding Hood” went to Granny Retail’s house. And since the wolf was otherwise engaged, we arrived safely.

A much more sobering party, it did reveal some truths.

Before the open last Friday, the Gross Domestic Product number showed a 1.1% growth in the second quarter. The day before, stats displayed that consumer spending grew. Flat growth, better consumer confidence. Is that what the Fed sees as they project into the near future?

Perhaps consumers will positively impact the 3rd quarter GDP. For now though, Retail is a must watch.

The good news is that Retail’s (XRT) phase remains bullish. The 50 DMA sits below the current trading level which gives it room for more selloff without becoming a game changer.

Indeed, the market has lots of “Ifs.” Since I am a big fan of the Modern Family, Granddad Russell 2000 (IWM) stays on my radar.

IWM, invited to the “Legendary Party” on Friday, fell under Deer Woman’s spell and became woozy. However, as he drank only one martini, he eventually sobered up and wandered away from that party looking for his wife.

By the end of Friday, IWM pulled himself together to close above the fast moving average.

I write a ton on TLTs, IWM, XRT and the rest of the Modern Family. I wholeheartedly believe that the dance among rates, consumers and small caps will continue to reveal.

Nevertheless, as I head on vacation this week, I leave you with one more tidbit-an overlooked but reliable indicator, Junk Bonds. JNK could be the swizzle stick in the martini that sits by the pool steps.

Barclays Capital High Yield Bond ETF JNK is made up of riskier bond choices comprised mostly from assets to U.S. debts with some significant exposure to foreign corporate notes. Those who believe that the corporate bond holdings will make good on their debts have helped JNK rally to match last October highs.

With JNK holding firm in the face of the Long Treasury Bond pressures, keep your eyes on the swizzle stick to best assess risk on or risk off.

Geoff Bysshe will be taking over the helm next week until I return on Tuesday, September 6th. Trade well my friends!

S&P 500 (SPY) It closed under the 10 DMA AT 218.32 after a wild session. 214.25 the 50 DMA and through the 10 has to clear all-time high 219.60 to keep going

Russell 2000 (IWM) 123.05 the 10 DMA is ended Friday just above. 122 support with 124.46 recent highs to clear

Dow (DIA) 185.35 the 10 DMA to clear first. 182.58 the 50 DMA support.

Nasdaq (QQQ) FANG stocks all closed green which explains this late day rally. 116 the clear support. 118.01 the recent highs to clear

XLF (Financials) Closed on new 2016 highs. That’s pretty good.

KRE (Regional Banks) 42.00 cleared which is saying something. Prodigal son can be extravagant. But as a member of the Modern Family, he is not to be discounted either.

SMH (Semiconductors) 65.60 the 10 DMA which has held up extremely well.

IYT (Transportation) This important member of the Modern Family needs some focus as well. 139.27 the 50 DMA support-I would not want to see that break

IBB (Biotechnology) Inside day above the 200 DMA-makes 282.76 support to hold

XRT (Retail) 43.60 is where the underlying MAs come in. Still say this must clear 46

IYR (Real Estate) Confidence right now, not showing up here as it is in a warning phase

ITB (US Home Construction) 28.60 the 50 DMA support.

GLD (Gold Trust) If holds 126 clears 127.15 maybe that was it for correction

GDX (Gold Miners) 26.50 support the 100 DMA

USO (US Oil Fund) 11.35 the weekly MA to clear-until then noise

XOP (Oil and Gas Exploration) Through 37.91 expect more

TAN (Guggenheim Solar Energy) Lots of volume last week.

TLT (iShares 20+ Year Treasuries) Unconfirmed phase change to warning-needs a second day.

UUP (Dollar Bull) 24.76 the 50 DMA.

SGG (Sugar) First close just above the 200 week moving average since 2013