A Constructive Rest

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Today's Mish's Daily was prepared by Geoff Bysshe, co-founder of MarketGauge.

The entire day was more or less contained by the first 30 minute range. All 4 market watch charts opened higher to create a high, sold off to create a low rallied to test the morning high and returned to test the low of the morning. It was a boring, but constructive rest day for the bulls. I would not be surprised if this week's ends up contained within last week's range.

S&P 500 (SPY) My short term bias is positive until 141 is broken. Look for support at 141.20 also. Expect resistance at 142.30

Russell 2000 (IWM) Today's range defines the important levels for Tuesday. I'll have a bullish bias until 80.50, but if I were to go long an index I'd prefer the SPY or QQQ's. The levels to watch beyond today's range are 81.86 as resistance and the 80.11 low for support from Friday's low.

Dow (DIA) Still the weakest index. Today it was unable to break Friday's high significantly and still sits well under the 10 DMA. If markets get weak I'll look for short trades here. Today's range are the levels to watch. The levels to watch beyond today's range are 130.80 as resistance and the 130.06 low for support from Friday's low.

NASDAQ 100 (QQQ) Still the strongest index the key levels are defined by last week's range. As long as AAPL is not falling apart I'd look to buy intraday reversals above 68.20. 68.00 should be good support at R2 and the 10 DMA

ETFs:

GLD First red candle since it broke out last week. The last 2 days have been contained within its Thursday range so we could get a significant move in either direction if this range breaks, 162.45 - 161.23. On the long side, however, I'd fear action like we saw in SLV today. I'm letting it rest.

SLV Broke out over its 2 day consolidation but then reversed and closed below its opening range, back into Friday's range and at the low of the day. It needs a rest.

XLF (Financials) Sitting at the 10 DMA after a constructive day of rest. Key level to break on the upside is 15.30, and on the downside 15.00 is the major support.

SMH (Semiconductors) INTC, weighs in at 19% so you may want to take a look at that chart today. It's at a very interesting support level with a doji inside day. The SMH was one of the weaker ETF on our list yesterday and sits right under the 20 DMA and under a fair amount of consolidation from August so the upside will tough. However, it is also right on top of the June highs, and the 200 DMA and more support come in around 32.60 so if it doesn't hold Friday's lows the downside range is probably down to 32.60.

IBB (Biotech) As long as this can hold over 135 it looks good.

XRT (Retail) I'll let it consolidate unless it's over 61, then it's an interesting long.

IYT (Transportation) If broke down below its 200 DMA, but as I've said previously... I'm not sure it cares about that. I don't see anything here.

IYR (Real Estate) The key range is 65.31 to 64.15 where a breakout over 65.31 should lead to new highs. Today is held up well.

USO (US Oil Fund) The pull back and nice recovery today looks bullish, but I feel it's too subject to what happens with tropical storm Isaac and talk of the government tapping strategic reserves. So with the weather and the government moving this market on a whim, I'll just watch.

OIH (Oil Services) It got off to a very strong start but the expected resistance at 41.40 and the general market action held it down. 41.55 and 41.75 are the key resistance levels If it moves higher. I wouldn't buy weakness but if it's moving higher it looks good.

XLE (Energy) Same story as OIH.

TBT (Ultrashort Lehman 20+ Year Treasuries) It read the 15.40 objective I've been talking about, a basic way to look for a reversal back to the upside would be to wait for the prior day's high to be broken or even better, closed above. The same is true for the TLT's in reverese. Until then let it continue down, or more likely, consolidate.

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