Even a 9-month old instinctively knows to hold on to her hat when the wind is blowing. After all, when the bough breaks, the market will fall, is a revision of the lullaby, quite honestly, I never understood as soothing.
With so many interpretations, the one I find most like the current market conditions is based around a 17th century ritual that took place after a newborn baby had died.
The mothers would hang the child from a basket on a branch in a tree and waited to see if they would come back to life. They didn’t.
Which of course leaves us wondering, if hung from a basket on a branch in a tree, can the market come back to life?
First, we must examine what gives the market life.
Supply and demand? Right now, with the Transportation Sector about to fail the 200-DMA, seems there’s more supply than demand in the economy. Dangerous unless that reverses.
Tax cuts? Turns out that the anticipation was better than the reality.
A trade war? No talk of that last year, now the most troubling thorn in the market’s side.
Trump-the blue collar billionaire? Falling unemployment numbers and wage increases are two of his better talking points. However now, after the first sign of fewer jobs created in Friday’s jobs report, even Powell’s speech about our strong economy did not help.
Technically, more in my wheelhouse, the Modern Family has relayed this price pressure since Sister Semiconductors (SMH) clearly topped out on March 13.
In the daily that night I wrote, “Wonder Woman might have the power to transform into an amphibian and navigate the deep ocean, but what happens if she runs into Moby Dick?” Oh Moby, you ginormous whale you…
At this point, expect more volatility.
And, as for the Modern Family..
Most key is the Russell 2000 (IWM).
As Granddaddy of the Family and the U.S. Economy (a great barometer for Trump’s world), if IWM holds 148 and clears back through 153.40, relief.