October 13, 2014
Mish's Daily
By Mish Schneider
While the session began relatively lackluster, the volume registered impressively as even halfway through the day, SPY’s volume exceeded the daily average. That furthered the case for lower prices or at least yet another substantial distribution day, as our signs for a bottom require good volume and a green close, not dismally red.
Admittedly, my coined phrase of “200 as the new 100” began as a cynical, tongue-in-cheek poke at the new age expression of “anything is the new anything,” an expression to highlight the current market volatility. At this point, the cynicism feels almost misogynistic. Enough already!
Phases continue to deteriorate as the S&P 500 tickled the 200 DMA then posted a new multi month low, failing another 1.5% from there while at least, holding the 2014 lows. One can guarantee that the bulls closely watch that line of demarcation (the 200 DMA), which would include any institutional buyers sidelined for now until or if the 200 DMA clears.
Therefore, we will stay out of the market’s way. Monday’s paltry rally early during the day may have been another chance to get short for some. For us, these oversold conditions provide an opportunity to scout the instruments for those that have already cycled through to bearish phases long before the indices began their descent and are now ready to cycle their way back to recovery. In other words, like 2010-2011 a clever stock pickers market.
S&P 500 (SPY) Today’s volume exceeded last Thursday and Friday’s. This is a meltdown into now support levels from May
Russell 2000 (IWM) October 9th 2013 the low was 103.00
Dow (DIA) If this can get a move back over 163.13, we are back over August lows-otherwise, do not try to catch a falling knife
Nasdaq (QQQ) 91.83 the 200 DMA and now 93.89 resistance
XLF (Financials) 22.33 the 200 DMA
KRE (Regional Banks) Already beat up, this one is still on my radar
SMH (Semiconductors) 44.25 a good place for this to stop dropping
IYR (Real Estate) Holding up over the 200 DMA which is a good example of instruments that already got hammered possibly cycling to improvement
GLD 117.80 now support with120-120.50 a good target
USO (US Oil Fund) 2 doji days in a row which could mean running out of steam on the downside. That would at least mean a move over 32.50
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs not even close to the 2012 highs
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