Free Market Analysis
Once again, biggest clue Wednesday, just like Tuesday, was that S&P 500 (SPY) could not clear previous day high. Nor could DIA, QQQ or IWM. So market may be oversold, but the scenarios I have laid out for watching for a potential bottom have not come to fruition-not yet.
S&P 500 (SPY) Touched down on the EMA as it continues in oversold territory. Also filled a gap from 02/03/12.
Russell 2000 (IWM) Never gapped higher back in February. Been looking at 75.50 as next support. Oversold with no classic signs of bottoming at this time
Dow (DIA) Most promising or should I say most clarifying perhaps since this had an inside day. Really oversold daily RSI
NASDAQ 100 (QQQ) With RSIs extremely oversold, would not look to short, rather, wait to see when signs of bottoming action emerges.
GLD 148.27 last swing low 12/29/2011
XLF (Financials) Won't make a move in this until it is clear that it can close back above the 200 Weekly moving average or it cannot. 14.40 is a swing area
IBB (Biotechnology) Until it crosses 126.90, that area could wind up as triple tops. Wednesday turned out as an inside day
SMH (Semiconductors) Could not hold 32.15 so now we look at the 200 DMA
XRT (Retail) Held 59.00 with an inside day-but unless it gets back over 60.08, no reason to cheer
IYT (Transportation) I continue to watch in amazement how well 91.00 is holding.
IYR (Real Estate) Became a short under 63.00 and now sliced through the 50 DMA. 61.70 next area of support
USO (US Oil Fund) oversold and clearly getting more oversold
TBT (Ultrashort Lehman 20+ Year Treasuries) Weekly RSIs very oversold-can rates go to zero?
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Biggest clue Tuesday was that S&P 500 (SPY) could not clear previous day high. Nor could DIA or IWM. NASDAQ (QQQ) made a bold attempt with early strength from AMZN, GOOG in particular, but AAPL gave it up the last hour of the day, breaking last week's low. No phase change from warning, but certainly no sign of bottoming action either.
S&P 500 (SPY) 132.75 next support area against the exponential moving average as it continues in oversold territory
Dow (DIA) Really oversold daily RSI
NASDAQ 100 (QQQ) 63.23 is the low from March 6th when it left a DOJI island bottom. Could well gap under but with RSIs extremely oversold, would not look to short, rather, wait to see when signs of bottoming action emerge
GLD 148.27 last swing low 12/29/2011
XLF (Financials) 14.35ish the retracement to the weekly moving average
IBB (Biotechnology) Until it crosses 126.90, that area could wind up as triple tops
SMH (Semiconductors) if 32.15 holds-then might look here for strength above 33.00
XRT (Retail) Broke the bear flag and now looking at last week's low 58.57.
IYT (Transportation) 91.00 important and still holding-sort of amazingly
IYR (Real Estate) Gave up 63.00 although still in bullish phase. Now looking at the 50 DMA 62.29
OIH (Oil Services) Daily really, really oversold-this is not where I would go for shorts right now
TBT (Ultrashort Lehman 20+ Year Treasuries) Weekly RSIs very oversold
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A bit hard to short the market at these levels as far as risk is concerned which means a good time to brush up on what constitutes a bottom signal to buy while we stay mainly in cash. Market has rolled over indeed for those who took the accelerating warning phases last week and shorted then. Now, a bit late to that party.
S&P 500 (SPY) 132.50 next support area.
Russell 2000 (IWM) Under 78.00 and 75.50 looks obvious. Above Monday's high though-be flexible
Dow (DIA) Oversold daily RSI
NASDAQ 100 (QQQ) 63.48 last week's low making that the new key area to watch
GLD Got short at 162, covered at 155 and missed this last leg down as oversold
XLF (Financials) 14.35ish the retracement to the weekly moving average
IBB (Biotechnology) Here is one reason it is hard to short now-this group had an inside day way outperforming
SMH (Semiconductors) Want to see if 32.15 holds-then might look here for strength
XRT (Retail) Broke the bear flag and now looking at last week's low 58.57.
IYT (Transportation) 91.00 important and still holding
IYR (Real Estate) Must clear 64.00 or see what happens at 63.00. But this and biotech are markets best hope right now
USO (US Oil Fund) oversold
OIH (Oil Services) Daily really, really oversold-this is not where I would go for shorts right now
TBT (Ultrashort Lehman 20+ Year Treasuries) Weekly RSIs very oversold
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We came back from vacation to one of the toughest weeks I can remember. Warning phase, it was a stock pickers, hit and run market leaving both bears and bulls holding the bag way too often. I began the week looking at retail and real estate-both held up well. But the financial sector started to falter, and that was before the JP Morgan news hit the stream. Consumer confidence ended the week with somewhat of a high note. So here we are-bad news/good news-mixed market-exactly what warning phases are made of.
S&P 500 (SPY) Four failed attempts to get through 137 area and volume patterns that favor the bears. But, ended with a hammer candle and took a lot of bad news on the chin.
Russell 2000 (IWM) Under 78.00 and 75.50 looks obvious. Over 79.60 and 81.00 is next. Stuck in the middle
NASDAQ 100 (QQQ) After 2 inside days would have expected some follow through when it broke the highs. But, since that did not happen have to think lower unless 65.00 clears.
GLD Did not rally enough to get us short again. Until then, aside
XLF (Financials) 14.38 the retracement to the weekly moving average
IBB (Biotechnology) Cleared 125.20 so fast on Friday, it was hard to chase. A close above 126.65 would look good which would be one reason to start thinking market is giving us ample time to buy in spite of the negative indicators.
SMH (Semiconductors) Looks better than the market provided 32.15 holds
XRT (Retail) A bear flag forming so unless it clears 61.00 lost some enthusiasm
IYT (Transportation) 91.00 important
IYR (Real Estate) Must clear 64.20 or see what happens at 63.00. But this and biotech are markets best hope right now
USO (US Oil Fund) DOJI hammer, oversold-200 DMA at 37.05
OIH (Oil Services) Daily very oversold-this is not where I would go for shorts right now
XLE (Energy) Rallied into early April resistance and stopped with another doji hammer candle close-but not that exciting
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Most notable feature of the day is the second inside day in NASDAQ (QQQ). With its completely neutral slope on the 50 DMA the warning phase has not accelerated, but at the same time is no longer considered "weak". So, is it any wonder the ranges over the last 2 days have stayed inside and narrow? Based on past patterns, the indicators point to more downside unless the QQQ can get over 64.75 with volume.
S&P 500 (SPY) When I write I prefer to sell rallies, I am hoping for a more substantial one than it had Thursday. But, now that the oversold RSIs are alleviated, if this comes in lower, maybe this was the rally and time to just get short until 132.00
Russell 2000 (IWM) Under today's low, I would expect more selling with next support 75.50
Dow (DIA) Unless this clears 130.50 area, also continues to look weak
GLD A move up to 158 would be a good short opportunity
XLF (Financials) Spent all day above 15.00 then fell at the close trading even lower in the aftermarket. 14.38 back on the table
IBB (Biotechnology) After the inside day, followed through to the upside. Now has to clear 125.20 or could roll over again
SMH (Semiconductors) I expected more. 32.15 support to hold or more downside
XRT (Retail) Tried the 50 DMA and closed beneath. Must continue to move higher or vulnerable under today's low
IYT (Transportation) 91.00 next support
IYR (Real Estate) Tried 64.20 again, but weakened by end of day. Still want to see what happens at 63.00.
USO (US Oil Fund) Must clear 37.05
TBT (Ultrashort Lehman 20+ Year Treasuries) Failed at the fast moving average. 17.70 recent low
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