by Mish on March 12, 2015

George Bernard Shaw

So have I made my point yet? The one about Sheep scattering, grazing, filling up, pooping and then scattering again? Good. Let’s put that aside now and talk about trading ranges, and leading sectors/ groups.

Beginning with the 2015 Granddaddy of indices, the small caps Russell 2000s (IWM). in my Sheep world (couldn’t resist), the moves have been fairly gentle on both the up and downside. A bit gentler on the upside than on the downside initially, true; but Thursday would make the competition on which way was less/more gentle a tie.

My point is that the Russells. after a yearlong consolidation in 2014, should dominate this year. That means, I will keep my eyes here to dictate the moves within its range thereby, if it breaks the highs. expect the others to keep moving up. Conversely, if it breaks this week’s lows. expect a decline back to its early 2015 lows around 114.00, dragging most things in its path along with it.

Not that IWM stands alone-it has family, whom we will call Grandma and siblings. Grandma is the Retail sector (XRT) -after all, she controls the family budget. Retail. which I mentioned, had a reversal pattern that negated itself over 98.45, soaring through that level and looking like it too wants new highs over the recent early March high.

Brother Biotechnology (IBB). is saying, “Hey bro, done my job already. I’m just gonna kick back here, smoke my pipe and let you all catch up.”

Sister Regional Banks (KRE). well, she acted like Wonder Woman, flying through the January Calendar Range high and onto new highs since the one posted nearly a year ago at 42.79. You go Sistah!

Then there’s the mischievous youngest brother Semiconductors (SMH). He’s like, “I carried this family for 3 years now. You guys take the ball since I am heading to the Cuba-now that I can.”

Finally, there’s the transgender sibling, Transportation (IYT). He now she, felt whole again beginning Wednesday by putting in a reversal candle. Then on Thursday, she cleared the 10 and 50 DMAs and closed well enough to be a contender. She has a ways to go before seeing the January Calendar Range high, but we will have patience since she’s just getting used to her new found confidence.

We do want to see confirmation as this week draws to an end. The in-laws, S&P 500 and Dow. have to close above the 50 DMA again tomorrow to stay in bullish phases. And Uncle NASDAQ. now falling behind, has to at least trade above 104.50. If it clears back over 106, the market (like my sheep) will head into the weekend very full, and maybe even a little bloated!

S&P 500 (SPY) Unconfirmed bullish phase provided it holds 206.

Russell 2000 (IWM) Recent high 123.78 with 122.15 area pivotal-good volume too

Dow (DIA) Has to hold and close above 177.70

Nasdaq (QQQ) 104.48 the 50 DMA and 106.00 the point to clear

XLF (Financials) 24.60 the point to clear, then 24.90 and has to hold 24.05

SMH (Semiconductors) The 50 DMA is 55.05 which has to hold now-

IYT (Transportation) the 50 DMA or around 161.55 now has to hold

IBB (Biotechnology) Has some resistance to clear but as long as it holds over 342 area all good

XRT (Retail) 2015 high 99.74

IYR (Real Estate) 77.84 has to hold to keep this in the game