Artificially Inseminating Cows & Heifers

October 20, 2014

Mish's Daily

By Mish Schneider


With eyes primarily focused on the indices, particularly watching to see if the DIA could confirm the island bottom or if the QQQs would endure, Monday’s session proved yet another example of the resiliency of the market all around.

Even with IBM opening up 8% lower, the Dow hung in there like a fertile herd bull with a robust libido. Interestingly, the Dow (DIA) also posted an inside day. With two complementary technical patterns at play, the Dow just might be the most happening place for Tuesday- a clear close your eyes, and follow the range break up or down.

The Financial sector (XLF) ran above 200 DMA, which clearly ups the chances for the bulls. Semiconductors and Transportation remained firm over the 200 DMA while Biotechnology and Real Estate entered an unconfirmed bullish phase. Retail finally broke over the top of the range of the last 5 trading days with now overhead resistance at the 200 DMA, the place to clear before we can talk phase change.

By NASDAQ pressing up against the fast moving average, the small caps still relatively underperforming, and SPY yet to clear the 200 DMA (although real close), we do need the Dow to take care of business or the following warning applies:

“If you have more than one bull in your herd, there's a risk that there may be more fighting than mating, and a risk that one or more of your bulls may be injured or even killed.” https://www.wikihow.com/Breed-Beef-Cattle

S&P 500 (SPY) 190.70 is the 200 DMA to clear. Otherwise, a break of 187.00 really, should seal its fate

Russell 2000 (IWM) Needs to really clear 108.80 for a stab at 110 and hold 106.70

Dow (DIA) Confirmed the island bottom with an inside day. Over 163.95 follow up and below 162.21 say goodbye

Nasdaq (QQQ) Confirmed the improved phase to warning with resistance at 95.00

XLF (Financials) Unconfirmed phase change to warning if can hold 22.35

KRE (Regional Banks) Inside day making this interesting over 37.14

SMH (Semiconductors) If this gaps over 47.56 and holds that gap, that would make for a possible island bottom-strong pattern in deed, If now, under today’s low, trouble

IBB (Biotechnology) Unconfirmed bullish phase but marginally

XRT (Retail) Got real close to the 200 DMA at 84.73

IYR (Real Estate) Unconfirmed phase change to bullish

ITB (US Home Construction) Unconfirmed phase change to bullish

GLD 120.20 and above clears the 50 DMA

USO (US Oil Fund) Worth waiting for it to clear 31.92 against recent high to catch a good bounce

FCG (First Trust ISE Reserve NatGas) Over 15.15 looks better for a bottoming formation

TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs 120 pivotal area held and after last week’s volatility, this looks a bit too good keeping me from getting really bullish

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