October 21, 2012
Mish's Daily
By Mish Schneider
For the sake of redundancy, some anniversary present-and after 25 years, we were hoping for silver not a lead balloon. A couple of potential bright spots: Financials and transports held their fast moving averages, homebuilders barely faltered. Overall, Semiconductors, real estate, retail (although managed to hold last week's low) are vulnerable. 2012 remains a solid up year in S&P 500; but the expectation that new highs are around the corner seems farfetched. But, always keep an open mind. An unconfirmed weak warning phase is just that- a weak warning for now.
S&P 500 (SPY) Unconfirmed weak warning phase with Friday, October 12th low 142.58. Noteworthy is that even with the selloff, the low at the start of last week 142.77 held-only in this index, however. No picking bottoms though, as lots of damage has been done with this correction and one has to wonder just how much resiliency there is over and over again. Distribution day in volume.
Russell 2000 (IWM) Gapped lower under the 50 DMA right from the get go on Friday and the tone for the day was set. I would be aside here as more downside seems limited, with a rally-and the attraction to retest the 50 DMA- a factor.
Dow (DIA) 132.75 the low from 10/12. Like SPY, a weak warning phase with the 50 DMA close-133.40.
NASDAQ 100 (QQQ) Started to see acceleration in the warning phase as this now approaches oversold. AAPL reports this week.
ETFs:
GLD Held the 50 DMA and outperformed the market. One of the first places to look for a bottom.
XLF (Financials) Could be looking at a double top. Could be looking at a buy opportunity against 16.05. If this gaps under that level, as disappointed as I would be, would have to think the former statement is more likely.
IBB (Biotechnology) Wrote all last week to ignore this group as it looked tired.
SMH (Semiconductors) Another fine example of how well trading range breaks on inside days works! But, tired?-this drifted into a coma. But a return over 31.00 and perhaps "It's Alive!"
XRT (Retail) 61.85 support. 62.50 the 50 DMA and pivotal area.
IYT (Transportation) Step back and there is a range this year between 86 and 96.
IYR (Real Estate) 64.50 support on the fast moving average although, back in an unconfirmed warning phase.
USO (US Oil Fund) 33.31 last week's low
XLE (Energy) Held up well-in fact, closed above where the week began.
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