The Market Is Dead Alive, But Donned In A Vibrant Scarf

One cannot kill something that is already dead. And one cannot kill this market, even though technically, many people think that it is already dead.

Bonaparte, our dead alive dog mascot, disguises his status by throwing an elegantly tied scarf around his neck. 

Trust me, it fools people. (Or at least it fools our living dogs.) 

Similarly, the market wears a vibrant scarf that keeps folks fooled into thinking it’s alive. Even in the face of the constant onslaught of trade war news, every dip is bought.

However, the rallies are becoming shallower.

Perhaps we can say that the market’s rally is dead alive, currently buried in a very shallow grave.

Every Economic Modern Family character closed lower week to week with one interesting exception.

Top left is the Russell 2000 IWM. With an inside week under its scarf, the range to watch is 157.19-159.88.

Plus, IWM did close lower week to week, although marginally.

Middle top is Retail XRT. With most big retail names already done with earnings reports, all eyes look towards Black Friday.

XRT held on to the support level on the daily chart. On the weekly chart, it closed right on the 200-week MA (green). However, this too closed lower week to week, by a significant margin.

Top right is Transportation IYT. That closed lower week to week by nearly $2.00. Therefore, by strictly percentages, this had the second worst performance of the bunch.

The underlying support in IYT holds though.

Bottom left is Regional Banks KRE. One could make the argument for a bull flag. And, although it closed lower week to week, it only did so by a smidge.

Bottom middle is this week’s superstar, Big Brother Biotechnology IBB. Lots of pharma stocks rallied. But remember, this sector is in the MF because of its reliable measure of investor sentiment. And, one should note, IBB is often the last sector to rally finding itself alone at the top.

Nevertheless, some digestion between 112-115 is healthy. And, with the 2019 high at 116.25, a push above that price after the holiday will be a good sign.

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Disclosure: None.

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