June 28, 2011
Mish's Daily
By Mish Schneider
QQQ ended up 1.5% and as expected, with lighter volume than yesterday. It got through 55.50 with the next resistance up at the lows made on May 25 at 56.47 and beyond that the 50 day moving average. I still find the declining slope on the 50 day moving average troubling. Now, 55.50 represents the top of the recent consolidation, but it is 55 where the 200 day moving average is that is the most important area of support.
SPY closed right below the adaptive moving average. It also had light volume. What is interesting is that even with the last two days of incredible moves to the upside, SPY has not gotten through the top of its recent trading range and area of consolidation. A break above 130 should take it to 131.50 with the declining 50 day moving average just overhead at 131.90. It is quite possible that, given the upcoming long weekend, we do not get through 130 and instead, go back down to test support at 128. Unless something unusual happens, it does seem unlikely that we will return down to the 200 day moving average in the next couple of days.
It would be healthy to see some digestion in the current trading range over the next couple of days.
IWM 82.11 is the overhead 50 day moving average which also continues to decline. This index still looks the strongest out of the three with 80.35 and better support at the 79.70 area.
It is easy to forget that all of the indexes are still in a strong warning phase but that hasn't stopped us from catching some big moves like AMZN which we exited today with a $13.00 profit or YOKU which we entered for a day trade at 30.60 and took profits along the way at 32, then 35, exiting the balance at 37.25.
ETF's:
SMH still an area of consolidation around 200 day moving average. Also still underperforming the overall market. Today's low touched the 200 day moving average, but unless it takes out 33.50 on the upside, still see semiconductors as vulnerable and one of the very first places to go for a short should the market begin to roll over.
IBB as expected, a great performer to the upside. Once it took out 104.03 yesterday, it started to look good and then over 104.30 today it got enough momentum to get up to the 50 day moving average at 106.07 closing just on it giving us an unconfirmed return to a bullish phase.
XRT also did what was expected by confirming into a bullish phase taking out 52.87 the recent high. Now, will watch to see if it can hold above the 50 day moving average at 52.31. With both IBB and XRT, will look to those as indications of whether we will continue higher or digest and find support at lower levels.
IYR slope of the 50 day moving average has now pointed back up even if the price remains well below. Once it gets above 59.80, imagine that it will have momentum to get up to the 50 day moving average 60.64. Otherwise, it must hold 58.00 for it could very easily begin to drag down the rest of the market should it break that area.
XLF is in a bearish phase and continues to be range bound. 14.62 support and 15.20 resistance.
OIH was a big performer today crossing back over the 200 day moving average and closing above the adaptive moving average. The 50 day moving average overhead at this point remains significant resistance, yet today was the first indication that perhaps we have seen the lows in the oil and energy sectors.
GLD** Anticipating that this could rally up to 50 day moving average by the end of the week.
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