The fairy godmother tells Little Nemo to “proceed boldly over the carpeted path in the sky and to fear nothing as she would be near him continuously”.
I almost feel like ending the Daily right here.
After all, much can be said for the market and its fairy godmother.
Instead, I will review the close to a yet-another-phase-change in Sister Semiconductors (SMH) and the clutch save by Transportation (IYT).
SMH ended last week in an unconfirmed bullish phase. SMH ended yesterday back in an unconfirmed warning phase.
And today, after a valiant attempt, SMH confirmed the warning phase.
Since we have called SMH our Wonder Woman, does today’s action prove that like the character itself, all the back and forth will lead to a sequel?
Can SMH turn out as the market’s fairy godmother?
Yesterday I wrote, “Should SMH confirm the warning phase, we will have to count on her siblings to take over the dance”.
That is where Transportation (IYT) the sector leader last week comes back in.
Like SMH, IYT has been a bit all over the place.
Several times since May, IYT has roared to new highs, created a topping pattern, corrected, then roared once again to new highs.
Today, IYT did the dance and saved the day.
After a shaky start, IYT closed back above a key critical price point.
However, it needs to do more-like clear the recent all-time high and keep going.
That’s where Sister Semis could help.
First, SMH will need two closes over the 50 daily moving average at 106.40. If not, it must close this week over 104.
Should it improve in phase, a move over 108 will excite buyers.
Finally, regardless of what SMH does, we still have a reversal top in IYT.
That means, to “not-ice anything on the way”, we ultimately must see IYT follow the fairy godmother’s wand.
S&P 500 (SPY) 289.50 pivotal area which means above good was 5 ticks below today’s low. Now, 291.74 the current all-time high.
