October 30, 2013
Mish's Daily
By Mish Schneider
Quote: Jane McGonigal
With the market (Dow) rallying 111.00, we have the fewest number of positions in the portfolio we have had since early September. And there’s the disconnect. The S&P closes on new highs, the Dow negates the topping candle looking like it’s headed back up to the September highs. The small caps and NASDAQ continue their sideways digestion with now 2 doji candle days. So, why are we so light? Partly responsible is earnings season. As a general policy, we exit before a report and do not enter a swing trade 4 days before one. (51 US companies report on Wednesday!) Second, is the overbought conditions in the indices. Yes, things overbought can get more overbought, but our model is based on risk/reward parameters. Third, is the upcoming FOMC. Not that we stake our old positions on Federal Reserve Policy; we do tend to take the safer route and with all the other factors aforementioned, wait until that dust settles.
Russell 2000 (IWM) One could argue 3 shooting star candles last 3 days-which means either a new launching pattern emerging, or a topping pattern. Seems the latter.
Dow (DIA) Cleared 156.20 handily. Overhead channel resistance at 157-there’s the risk/reward I am referring to
Nasdaq (QQQ) Similar argument on those shooting stars as in IWM here
XLF (Financials) Negated the topping candle and a super big focus for Wednesday post Fed. Lots of potential Subscribers: The 10 DMA will be our risk
SMH (Semiconductors) The power of negating topping candles-this cleared 40.62 on Monday-and whammo!
XRT (Retail) Inside day near the highs. Now, that’s interesting.
IBB (Biotechnology) Digesting its recent move
IYR (Real Estate) Confirmed phase change to Recovery-which is a downgrade
XHB (Homebuilders) Digesting
GLD Sitting on the 50 DMA
USO (US Oil Fund)Inside day
OIH (Oil Services) Cleared the brick wall candle at 49.78
XLE (Energy) Looks strong
XOP (Oil and Gas Exploration) 72.16 now the point to clear
TBT (Ultrashort Lehman 20+ Year Treasuries) FOMC 2:00 EST
UUP (Dollar Bull) If confirms through 21.45 will reverse the downtrend
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