"Buy the Ticket, Take the Ride" $SPY $QQQ $IWM $DIA

---

"Buy the Ticket, Take the Ride" $SPY $QQQ $IWM $DIA

Quote from last Thursday’s Daily: “The market remains in a firm bull phase, which is comforting at this point. That doesn’t mean we can’t or won’t see a move to test the underlying 50 day simple moving averages.”

Tweet from last Friday: “The key reversal 5/22, the boxed in range since then, now the close at the low end makes for extreme caution heading into next week.” Even the strong sectors are impacted when the rush to the exits happens at the end of a week and month. Rates firming along with the US dollar, a round of lukewarm economic numbers and nary a peep from the Federal Reserve, all gave the market a Hunter S. Thompson Fear and Loathing Conclusion.

Going into this week, not exactly recommending a short position in the indexes; after all, they remain in bull phases. But, with now 4 significant distribution days in volume, the warning is confirmed. Best advice besides finding equities that have entered into negative phases that one could short, is to wait out the flush for a new buy opportunity with low risk. It could mean the indexes hold the 50 DMAs, it could mean they break them, get super oversold, and then return back through.

S&P 500 (SPY) 4 distribution days in volume over the course of 2 weeks and a close under the low of the “boxed-in” range certainly carries obstacles for this index. 160 is huge support given the runaway gap began from there and it’s where the 50 DMA lives. Could it comeback? Sure. But it will have to start with a close back over 164.00

Russell 2000 (IWM) Not nearly as ugly as the SPY for a couple of reasons. First, the volume has been light-no distribution days to speak of. Second, it remains in the boxed-in range. Therefore, as the go-to index with the ever important small caps, 96.50 key support and a move over 98.50, especially on a closing basis, positive.

Dow (DIA) 151.55 pivotal

NASDAQ 100 (QQQ) Like the Russells, held the bottom of the range 73.00. Ominous if it gaps below there Monday.

ETFs:
GLD A classic case of following the phase. After the gap up last Thursday that almost had it looking like it was suspended in midair, it gapped lower on Friday, then continued southbound.

XLF (Financials) In spite of everything, closed out the month over the 80 monthly moving average, first time since 2003

IBB (Biotechnology) Held 179 support for what it’s worth

SMH (Semiconductors) Naturally it sold off along with the market. But, held onto 38.00. Let’s see what happens this week.

XRT (Retail) 77.00 held for now but now has to clear 78.00 on a closing basis to return confidence

IYT (Transportation) Although this broke 113, it is now approaching support levels from mid-March

IYR (Real Estate) In hindsight, it screamed correction at the market long before everything else did. Now, oversold.

USO (US Oil Fund) 32.00 area of support

OIH (Oil Services) It failed 43.80 the last day of the month, which is disappointing, but also a reason to look at the 50 DMA 42.85

XLE (Energy) Gave up 81.00 now looking at 79.00

TBT (Ultrashort Lehman 20+ Year Treasuries) Not quite a key reversal candle, but interesting sell off at the end of Friday’s session

XOP (Oil and Gas Exploration) Not a great sign to see a close back under the weekly trendline breakout. Watch to see if 60.00 can hold

UUP (Dollar Bull) Bounced a little after testing the 50 DMA. Looking to see if this support holds

For more detailed analysis join me, along with hundreds of other subscribers, at Mish's Market Minute and get my daily trade picks, trade alerts, training videos, and exclusive analysis tools. Sign up for Mish's Market Minute now and get a free 2 week trial!