Cactus Wrens have no fear. They are big and bold. They perch and nest in cacti. They announce their presence strutting and fanning their feathers. This nestling sits in its cactus nest, clearly feeling right at home. Nature provides an apropos metaphor for the market.

The Market

An environment that prefers to strut and fan. An environment that gives birth to thorny controversy after thorny controversy. An environment that thrives in thorns.

Last week, we carefully watched the Modern Family for clues to the market’s next direction.

With July’s kick-off, will the Modern Family impersonate the cactus wren and thrive among the thorns?

The Russell 2000 closed the month out above 140.

With the top of the channel resistance at 142.90 nearing, IWM’s strength most likely means the market likes its big and bold status.

Transportation (IYT) fanned its feathers. An extremely healthy close for the month, IYT proves that like the cactus wren, it requires very little water to sustain.

Semiconductors (SMH) confirmed the Warning Phase. Yet after a 10% correction, Semi’s just need to hold 80.00.

Even if SMH doesn’t rally much from here, the rotation to small caps and transportation is healthy.

Biotechnology (IBB) held 310 and ended the month with a quiet inside day. Speculators who bought over 300, most likely took the day off to enjoy the view from that perch.

Regional Banks (KRE) also had a quiet inside trading day. Over 56.00 though, that chart begins to convince us that the rally is real.

Under 54.00, we look to see if the baby wren fell from its nest.

Granny Retail (XRT) wows me the most. While falling out of favor for the first half of 2017, she now looks nourished.

Confirming a V-bottom (a technical signal which indicates a dramatic move lower followed by initial bargain hunters buying), could be this summer’s cactus flower. Male cactus wrens build “dummy” nests to fool potential predators away from their babies.

Maybe the recent tech and NASDAQ sell-off was meant to do the same.

A paternal ploy to make the bears seem “dumb.”

We will be taking a holiday Monday, July 3rd. See you all on the 5th. Happy 4th of July! Thank you for your readership.

S&P 500 (SPY) Inside day. 244-245 resistance to clear. 242 pivotal Under 240 not so good

Russell 2000 (IWM) Inside day. I’d still consider the channel resistance at 142.90 as the number to watch. 140 pivotal. 137.50 support

Dow (DIA) 214 pivotal. 212 support. Over 215, onto new highs

Nasdaq (QQQ) Confirmed warning phase. 140 resistance. Barely held 137.70 on a closing basis for the month. Inside day. If fails 137, 135 next stop

KRE (Regional Banks) Inside day. Must hold 54.75 clear 56.00

SMH (Semiconductors) Confirmed warning phase. 83.50 pivotal resistance. 80.75 support.

IYT (Transportation) 170 pivotal support. Through 172.90 impressive

IBB (Biotechnology) Holding 310 perfectly keeping this in the game.

XRT (Retail) 40.00 pivotal-above 41 better

IYR (Real Estate) If holds 79.50 better

GLD (Gold Trust) Under 118 support at 117. Over 120 new ballgame

GDX (Gold Miners) Those negative sloping moving averages are relaying more possible weakness to come.

XME (S&P Metals and Mining) Closed above 29.90 for the week. Through 30.60 seems like a good place to get long

USO (US Oil Fund) 2 weeks ago, the Benzinga team asked me what I thought about analyst’s sell signal at the lows. I said pay no attention. I should have said, buy, buy, buy! Now, 9.75 the 50-DMA comes into play.

TAN (Solar Energy) 19.44 should now hold if good. Must close above 20.00 to keep going.

TLT (iShares 20+ Year Treasuries) 126 pivotal-next support at 124

UUP (Dollar Bull) 24.90 resistance

FXI (China) Good setup if holds 39.35