November 27, 2012
Mish's Daily
By Mish Schneider
The reason I have been so focused on the phase changes and moving averages is for exactly what we saw in Tuesday's market action. When the DOW regressed in phase on Monday and NASDAQ failed to improve its phase Monday and into Tuesday, the overbought S&P 500 and Russell 2000, in spite of the improved phases, became more suspect. Add the continuing flight to Bonds and an unsurprising announcement that the fiscal cliff talks are floundering, and viola-the selloff. But of course, living in the tech bubble, the real lesson here is that warning and distribution phases are not the same as bullish ones, in spite of improving market tone that ended last week. Where do we go from here?
S&P 500 (SPY) Distribution Day in volume on a day after an inside day that took out the previous day high, but held the low of 140.19. However, the better support is 140 with next level a gap fill to139.57. If SPY comes in higher, 141.40 is the ultimate level to clear
Russell 2000 (IWM) 7 days up in a row with another close above the 200 DMA 80.50 putting this into a confirmed warning phase.
Dow (DIA) Could not clear the 200 DMA making that level ever so important especially since it is now in a confirmed distribution phase.
NASDAQ 100 (QQQ) Tried for the 200 DMA but could not make it closing on the lows. Could see 64.00 especially if AAPL breaks Tuesday lows.
ETFs:
GLD Broke the 50 DMA making 167.80 the next viable support
SLV The 50 DMA support is 32.25 and if holds, 34 the next objective.
XLF (Financials) Confirmed warning phase after registering a bullish one Friday meaning all we can say is that this rallied to resistance and looks a bit dicey from here.
IBB (Biotechnology) Has room down to the fast moving average at 134.10
SMH (Semiconductors) Confirmed recovery phase. Watching to see if 31.00 can hold.
XRT (Retail) Over today's high will be a confirmed follow through on the charts.
IYR (Real Estate) Wedged between 63.25 and 62.50-the way it breaks should be followed
XLE (Energy) Could not hold the 200 DMA. If 70.00 breaks see more downside
TBT (Ultrashort Lehman 20+ Year Treasuries) 59.95 has to hold.
Every day you'll be prepared to trade with:
