November 19, 2014
Mish's Daily
By Mish Schneider
“Poetic Justice” Kendrick Lamar Lyrics
I just love when the metaphors work out. Call it poetic justice! My query Tuesday night was thus, “So, if the sheep are grazing in the meadow, the horses are bearing gifts, where are the wolves hiding?” My answer, “Like a hungry wolf shrewdly plotting out how to present as a sheep, these internals heed consideration.”
Current Market Internals: Advanced/Decline, Up/Down Volume Ratio and the McClellan Oscillator, which had all turned negative coming into this week, on Tuesday turned neutral meaning they remained technically in a sell signal. Wednesday, they became more negative once again especially given the weak performance of the Russell 2000s.
To be fair, although we expect the herd to run for shelter from time to time over the next several weeks, we equally do not expect any real slaughter, perhaps a sacrificial lamb or two, but that’s it as this year draws to a conclusion.
The Russell 2000s broke the November 5th low, yet held the 200 DMA. The Dow, NASDAQ and S&P 500 retreated from the highs, but defended the fast moving averages.
Really, best advice I continue to hold onto myself is where I began the week- “Although there always will be pockets of specific sectors and/or instruments that defy the norm, overall, 2014 will conclude evoking the 2015 animal spirit of the sheep, quietly grazing on the hill. Furthermore, “Do not hyper focus on the intraday market ticks, continue to take profits and trail up stops on existing positions. Moreover, execute new trades (if you are an active investor) using much shorter timeframes (day to miniswing) on new longs and hedge with short setups.”
S&P 500 (SPY) Seen these doji days near highs before. The delay from following IWM’s lead? Maybe.
Russell 2000 (IWM) 114.05 the 200 DMA. Now has major resistance 116.75 as well-in the middle noise
Dow (DIA) Doji and unchanged-like SPY, maybe a delay in selling of maybe not
Nasdaq (QQQ) 102.40 support to defend
XLF (Financials) 24.15 needs to clear
KRE (Regional Banks) Washout of longs but held good support levels-like again over 40.00
SMH (Semiconductors) no harm done
IYT (Transportation) Now would be a good time to see this come back to the highs
IBB (Biotechnology) Quiet
XRT (Retail) Held up well and still poised
IYR (Real Estate) Held 75.00 for dear life
ITB (US Home Construction) Hovering at recent highs for 6 days and counting-merits close eyes
GLD (Gold Trust) If it weren’t for last Friday I would think this action negative. Instead, it was logical to see sellers after that move
USO (US Oil Fund) 28.10 now a weak but mentionable double bottom if holds
XLE (Energy) Might as well wait for the 50 DMA
UNG (US NatGas Fund) Tried the 200 DMA intraday and didn’t close above it
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs 120 pivotal area and the 50 DMA to hold 118.17 (notice the slope moving up?)
Every day you'll be prepared to trade with:
