November 6, 2013
Mish's Daily
By Mish Schneider
Those 4 scenarios we have been watching distanced further from realization on Tuesday. The Russell 2000s held the necessary support but retreated from the overhead fast moving average. The Real Estate and Homebuilders groups fell in price. The Financials also weakened some. And, the TLTs or 20+ year Treasury Bonds, dropped substantially, even deteriorating in phase to unconfirmed bearish. Retail held up, making yet a new high, a good sign. But is that enough? Stepping back, no real damage was done to any of the 4 indices and the phase remains bullish. Volume was fairly light. Since who doesn’t like a theory-and even if you don’t, I assume you’re still reading because of curiosity- here goes one. What if the significance of the Federal Reserve’s next move is waning and the market is digesting the possibility that Quantitative Easing now has diminishing returns and tapering will not look like the boogey man? If that is the case, the drop in most groups should abate, the indices should continue to firm, some groups will fall more due to cyclical factors while others will rise. In other words, great opportunities for longs and shorts if you know where/how to look.
S&P 500 (SPY) Over 176.85 will look better and 175.22 support to hold
Russell 2000 (IWM) Inside day and now needs to clear 110.18 and hold 108.00
Dow (DIA) 154.80 support and 156.40 a good point to clear
Nasdaq (QQQ) Like to see 82.50 hold now in what looks like sideways consolidation.
XLF (Financials) 20.39 support and has to clear 20.65
SMH (Semiconductors) Back over 41.00 will be hard to argue with
XRT (Retail) New highs
IYT (Transportation) Digestion
IBB (Biotechnology) Held the 50 DMA
XHB (Homebuilders) Inside day.
GLD Seems this has more fallen out of favor to trade rather than just looking bearish
USO (US Oil Fund) More oversold-best I can say for it
OIH (Oil Services) 49.75 next place to clear
XLE (Energy) 87.62 highs to clear
XOP (Oil and Gas Exploration) Inside day
TBT (Ultrashort Lehman 20+ Year Treasuries) About to push over the 50 day moving average
UUP (Dollar Bull) Unconfirmed phase change back to Recovery
IFN (India Fund) 21.16 is a good high to clear
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