October 1, 2014
Mish's Daily
By Mish Schneider
Oscar Wilde
Is there any hope still alive as we saw all the holdouts except Biotechnology on the 50 DMA finally give it up-and in a big way?
I for one, who dreads buying strength, doesn’t exactly buy weakness, and prefers to buy when an instrument consolidates with the least amount of risk near a major moving average, is sort of glad for this action.
Now, we get to see what has real relative value versus the fluff we have seen in the last 1 year and 9 months with too many people looking like geniuses in a historical bull market. Do I sound cynical?
With that, SPY confirms the warning phase, QQQs and DIA enter an unconfirmed warning phase and IWM is now officially oversold on 2 different RSI timeframes. May 15th low there 107.44, Wednesday’s session low 107.43. How’s that for symmetry?
What to do from here? Bias definitely looks as though the cycle of the phases needs to deteriorate even more over time before we can pull out of this disintegration. However, even with the caveat emptor, we can go up before we go back down. And there are always the superior stock pickers, finding the counter movers.
S&P 500 (SPY) 190.55 is the August low with 197 now massive resistance and a place to consider selling into
Russell 2000 (IWM) Tested May lows-first to turn up? Wouldn’t surprise me
Dow (DIA) 169.00 resistance and August low under the 200 DMA-that’s not good.
Nasdaq (QQQ) 98.00 now massive resistance with 94.00 the August low
SMH (Semiconductors) My beautiful semis broke the 50 DMA and 50.00. 47.94 is the August lows
IBB (Biotechnology) 265.75 is the 50 DMA as this now remains the shining star of who’s who over the 50
XRT (Retail) 83.04 August low as this entered an unconfirmed distribution phase
IYR (Real Estate) Major outperformer but has not given a buy-until it clears the 200 DMA
USO (US Oil Fund) Under 34.00 not good
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs will negate the island top if fills gap to 118.67
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