June 30, 2013
Mish's Daily
By Mish Schneider
Not all too surprising, the market retreated from the 4 day rally, which followed the harder and more volume-packed 4 day decline thus ending the week in warning phases in all but the Russell 2000’s (small caps) which actually confirmed the bullish phase. Although the bonds rallied, the dollar steadied. It seems from a fundamental and practical standpoint, the market is beginning to price in the eventual tapering by the FED probably by September’s meeting. Ultimately that will mean some more divide in how the varying groups/sectors respond. Semiconductors closed confirming a reversal from an 11 year channel. With that technical pattern, expect to find good long term opportunities in that group. Retail should be fine and financials also closed out the quarter well-another area to watch for buy opportunities. Otherwise, Real Estate, Homebuilders, Oil Services, seem most vulnerable for the time being. And gold (GLD) after pointing out the 2-day surge in volume last Wednesday and Thursday, opened Friday on new lows and reversed. Textbook my friends! For this week, with an ensuing holiday, expect the S&P 500 to be range bound. Support around the 157.50 mark, resistance around the 161-162.00 area. Friday, the US market wakes up to the unemployment report.
Russell 2000 (IWM) Confirmed to a bullish phase with 2 notable technical patterns. First, the high on Friday failed to fill the gap left from June 19th’s big reversal candle. 98.16 is that number to clear. Second, the 50 DMA at 96.50 becomes critical support.
Dow (DIA) A perfect retracement to the 50 DMA and retreat on Friday. Could be the end of the dead cat bounce, could be more range bound as with SPY between 146.50 and 149
NASDAQ 100 (QQQ)What started out on Friday as weakest, had the best close. Therefore, look to this index for signs of strength Monday morning with the 50 DMA at 72.12 to clear and close above. Otherwise, 70.00 is the underlying support..
ETFs:
XLF (Financials)A couple of good aspects to this chart. One is the close over the 50 DMA and more importantly, the monthly uptrend held up after a huge decline.
SMH (Semiconductors) Interesting bullish engulfing pattern with a strong close ended the week. 37.70 is the 50 DMA to clear once and for all. 37.15 good gauge of support.
XRT (Retail) Another group in good shape. 76.00 key support and if can fill and hold the gap over 77.85, very strong
IYT (Transportation) 108.20-108.65 an area to hold. And, the 50 DMA is the area to clear
IBB (Biotechnology) 170 has to hold and eventually, 176 to clear
IYR (Real Estate)Here’s where we have to watch to see if the prospect of tapering by the FED can be absorbed without too much further damage. A good start would be a move over the 200 DMA
GLDVolume, volume, volume. 2 days’ worth before putting in a bottoming pattern on Friday-again with huge volume.
USO (US Oil Fund)Could not fill the gap from the island top. A bit volatile here but maintaining the bullish phase
TBT (Ultrashort Lehman 20+ Year Treasuries) 3 day fairly significant correction, with 71.55 the gap low place to watch for a hold
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