In 1878, after nine days of Nun’s prayers, a rare helix-shaped spiral staircase leading up to a loft appeared at the Loretto Chapel in Santa Fe.
With no attachment to a wall and built with dowels and wooden pegs, this staircase is billed as a “miracle.”
The builder, whoever he was, built a innovative masterpiece. Upon completion of the staircase, he disappeared without pay or thanks.
The staircase has two 360 degree turns and no visible means of support.
Today, Mnuchin announced “the biggest tax cut in American history.”
Yet, with no indication of whether the plan would be paid for or how, the scantily detailed proposal faces Congressional obstacles.
So after 100 days of the administration’s most devoted supporters praying for a miracle, can this tax reform get its two 360 degree turns with no visible means of support?
What can we expect from the rally of legend if it does or does not?
Looking at the market internals, year-to-date, Semiconductors yields the most gains at 12.4%. Energy posts the biggest decline at nearly 8%.
The Oscillators approach overbought in the S&P 500. Even more so in Nasdaq.
Short-term Volatility sits near its historical lows. However, intermediate-term Volatility has moved up.
Over the last two weeks, the S&P 500 has had only 2 accumulation days in volume versus 4 distribution days. That means the sellers have come out to play on the down days twice as much than the buyers have on the green days.
Last night I predicted that if “the Russell 2000 takes out the top of the channel on the monthly chart at 141.50 area, maybe it flies as high as 143 level.”
But by the end of April or sometime in May, if IWM closes or trades considerably beneath 140, the rally may max out.
Today, IWM took out 141.50, although closed a bit lower. Making new all-time highs, it pierced the top of the monthly channel. Prediction in motion.
Conversely and ominously, Transportation (IYT) traded back into a Warning Phase.
