2017
by Michele ‘Mish’ Schneider Director of Research and Education MarketGauge.com
Mish’s Picks
Uncertainty Is The New Sure Thing
Ed. 2
©2017 MarketGauge.com 1
Mish’s Picks for 2017
Who is Mish?
Michele 'Mish' Schneider, has 30+ Years of Trading
and Teaching Experience.
Mish currently serves as Director of Trading Research
and Education at MarketGauge.com. She writes and
produces our daily market analysis in "Mish's Daily",
and serves as a developer and trading mentor in
several our trading services.
Mish is a former floor trader on several New York
Commodity Exchanges, including Coffee, Sugar and
Cocoa, NYMEX and FINEX in NYC. While on the trading floor she also
served as a market analyst for two of the largest commodity trading
firms at the time - Continental Grain, and Conti-Commodities.
Mish has an M.S. Special Education, and has applied her educational
expertise as a curriculum improvement consultant to school districts in
the North East and New Mexico.
Mish is currently also a Managing Member in Market Gauge Asset
Management Company, LLC, and a partner in Wizard IP, a software
development company.
Mish was just recognized by MarketWatch as one of the world’s
top 50 Stock Market Analysts.
In December 2016, MarketWatch, an online publication owned by Dow
Jones, published “The Twitter accounts investors need to follow in
2017.” Written by Barbara Kollmeyer, her sub headline read, “These
financial tweeters will make you money or at least make you laugh.”
She goes on to write, “It’s that time again. That is, time for you to clean
out your Twitter closet as 2017 arrives. Toss the bots and Eggheads,
and add a few names who might actually give good guidance in what is
sure to be an interesting year for investors…. Michele Schneider, director
©2017 MarketGauge.com 2
of research and trading education at MarketGauge, tosses up techs and
charts.”
Uncertainty is the New Sure Thing
Looking at the Macro Picture, Mish continues to find the most value in
using technical analysis to assess next year’s trends.
She looks mainly for instruments that have reversed a 7-year trend or
are about to. Furthermore, she notes those instruments that should
continue their existing 7-year trend.
At the end of 2016, Mish looked at the Modern Family and the other 3
indices to decipher if they:
1. Have reversed a 7-year trend,
2. Are about to reverse a 7-year trend or are
3. Poised to continue a 7-year trend.
Here’s the verdict:
The Russell 2000: Poised to continue trend up if holds 129.00, the
June 2015 high. However, caveat that it must also clear above 139.00.
NASDAQ 100: Poised to continue trend up if holds if holds 115.75 the
December 2015 high. Must clear 121.50 to continue higher.
The Dow: Poised to continue trend up if holds if holds 183.35 the May
2015 high.
The S&P 500: Poised to continue trend up if holds if holds 214.00 the
May 2015 high.
That means, although a correction would not be out of the question,
the room to the downside is palpable before we can really say bull run
is over.
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The most concerning aspect is reflected in the chart below:
This is a weekly chart of the S&P 500. The dotted line is the 50-week
moving average. The solid line is the 200-week moving average. I use
a weekly chart so we can assess a longer-term outlook and not get
swayed by short-term volatility.
One major difference though between the bullish phase of most of 2015
and the second half of 2016? The distance between the 50 and 200 week
moving averages. Note that in 2015 the distance between the two was
quite wide. In 2016, that distance narrowed considerably.
What does that potentially set us up for?
Should SPY head back into a warning phase, the 50 is now much closer
to the 200 WMA. That could mean that if SPY breaks the 200 WMA and
heads into a distribution phase, should things go from bad to worse, we
could see a “death cross” or when the 50 intersects below the 200 WMA.
That would put the SPY in a bearish phase. Last time that happened was
in October 2009. And we all know how that worked out for the market!
©2017 MarketGauge.com 4
Modern Family Sectors
Retail (XRT): As you know, with retail 70% of the Gross Domestic
Product, this has already shown signs it could reverse its 7-year trend.
On the monthly chart, XRT is below the 23-month moving average. On
the weekly chart, it could break down sooner.
The Biotechnology (IBB): Has reversed a 2-year trend and could be
setup to reverse the 7-year trend if breaks under 203.00 First area of
support though is 240.00.
©2017 MarketGauge.com 5
Transportation (IYT): Less clear. A move under 145.00 will reverse
a 2-year bull trend. A move over 168.00 more in line with a bullish
continuation.
Regional Banks (KRE): Poised to continue trend up if holds if holds
providing no apocalyptic event occurs.
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Semiconductors (SMH): Poised to continue trend up if holds if holds
providing no apocalyptic event occurs.
The disparity among sectors became more disparate. For now, the
indices say no fire and brimstone on the immediate horizon. Yet, Retail
and Biotech-or the gauge for US economic growth and speculative
interest -say otherwise.
Four Categories of Specific Picks
Mish’s specific stock picks are in four different categories: Longs in big
trends, shorts breaking big trends, fundamental and technical bases,
and undervalued protracted bearish moves.
Long Picks In Big Trends
These picks are holding or clearing 80-month (7-year) and/or 23-
month (2-year) moving averages reversing a long-term trend.
Exelon Group EXC-Holding 23-mo about to clear 80-month
India Fund IFN-20.50 should hold-looking for return over 80-month
or around 23.00
Sugar SGG-over 23-monthly support 36.50
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Newfield Exploration NFX-over 23 and 80-monthly. See big
potential. The chart below illustrates the two moving averages and
how Mish looks for longer term trend reversals. Since 2011, NFX has
traded below the 80-month MA until 2016.
KB Home KBH-over 23 and 80-monthly should hold 14.50 (reports
earnings 1/11)
Taiwan EWT-over both MAs and should hold 28.00
Beazer Homes BZH-if holds 10 can see move over 16.50 positive
US Oil Fund USO-Looking for a weekly close over 12.00-then risk is
to around 10.60 longer term
Oil Services OIH-should hold 30.00 and needs to clear 40.00
DB Commodity Index DBC-over 23-mo and needs to hold 15.00
USG Corp USG-over both MAs-monthly close over 30.00 good
Freeport-McMoRan Inc FCX-12.70 support and has room
Cliff Natural Resources CLF-over 23-mo with 200 WMA at 11.15
©2017 MarketGauge.com 8
Short Picks Breaking Big Trend
These picks have broken a 23-month and/or 80-month trend
Twenty-First Century FOX-Already broke the 23-month moving
average and 26.00 the 80-month to break. The chart below shows
clearly the potential breakdown and a possible death cross in the
works should weakness continue.
Wynn Resorts WYNN-below the 80-Month with 60 first target
Dish Network DISH-If cannot hold above 60.00 and fails 58.00 lots
of room to the downside
Bed, Bath and Beyond BBBY-under 80-Month with room to 25.00 or
worse
EQT Corp. EQT-Broke the 80-month and the 200-week moving
averages. 69.00 should be resistance now with a break of 63.00
reason to see a move down to 50.00
©2017 MarketGauge.com 9
Apple Inc. AAPL-Bold prediction-needs to fail 112.00 on a monthly
close first
Facebook FB-under 117.00 see 107.00 then under than trouble
Whole Foods WFM-under both MAs and under 30.75 trouble down to
28 or lower
Baidu Inc. BIDU-Already in bear phase, the monthly chart breaks
down under 150
Picks With Fundamental and Technical Bases
These picks have both fundamental and technical bases. The price
parameters are listed. Most of these are newer issues and do not have
enough data to assess 2 and 7-year trends.
Avangrid Inc. AGR-should hold 36.00.
Livestock COW-over the 50 WMA but must clear 24-the 23-mo MA
Uranium URA-like to see over 15.00 (Cameco Corp CCJ stock-12.26
clears 23-month) (Clear Channel Outdoor Holdings CCO-over 80-
month)
Cara Therapeutics CARA-close over 10.00 positive
Dunkin’ Brands Group DNKN-Monthly chart shows possible inverted
head and shoulders. Close over 55.00 good
Yelp Inc YELP-30 support and monthly close over 40.00 can take it
to 50.00 or higher
Pandora P-Holds 10.00 and clears 15.00 could see 20.00 or higher
Gaming and Leisure Properties GLPI-if holds 26.00 and has
monthly close over 32.00-positive
DB Agricultural Fund DBA-A monthly close over 20.00 first step
Greece GREK-a monthly close over 8.60 good with lots of room up
eHealth EHTH-2 years under the 23 and 80-monthly MAs and could
be basing
Icahn Enterprises IEP-Must clear 64.00 the 80-month MA if holds
55.00
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JC Penney JCP-if clears 8.80 and then can get a monthly close over
10.00-upside room-note-an older issue therefore enough data for
longer-term trend chart.
Undervalued Picks In Protracted Bear Moves
These are not quite setup yet, but have potential as they are
undervalued compared to the rest of the market and have experienced
protracted bear moves.
FireEye FEYE-Given the rise of hacking, undervalued-weekly close
over 14 positive
Blue Buffalo Pet Products BUFF-22 support with monthly close over
25 positive
Blackberry BBRY-monthly close over 8 positive
Brookdale Senior Living BKD-if holds 11.00, could see a move to fill
a gap at 14.25 plus possible to get to 16.00
©2017 MarketGauge.com 11
First Solar FSLR-been under pressure since 2011. Waiting to see if
this can first get a monthly close back over the 23-month moving
average or dotted line.
Honorable Mention
The Volatility Index VXX- Note the date-April 2017 and the first 100
days of the new administration complete-this could be the time we
finally see volatility pick up
Stay Current With Mish’s Picks
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investors need to follow”
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