Diamonds in the Rough $SPY $IWM $QQQ $DIA

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This morning was ugly. The three indexes with inside days (S&P 500, Nasdaq and Russel 2000) gapped below the range of their inside days. The Dow Jones Industrial Average (DIA) fared the worst with a gap below the 50 DMA, bringing it into an unconfirmed warning phase. A close under the 50 DMA will confirm this phase change. Nasdaq held up the best out of the four major indexes. Watch for the indexes that are above the 50 DMA to hold the moving average and to clear the recent swing lows. Every index had a distribution day in volume. The uncertainty was favorable to GLD and the gold miners (if you were trading with us you would have caught these break outs). TBT was very volatile. It slid downward most of the day after gapping higher on the open. It experienced a late day rally and closed near it’s opening price. Home Builders fared well during the slide in rates. Tomorrow, one should watch for stocks with impressive volume, stocks that have held up well in today’s sell off and stocks that closed well and are holding moving averages.

S&P 500 (SPY) Gapped under the inside day and tested the 50 DMA. Distribution day in volume. Holding the 50 DMA

Russell 2000 (IWM) Gapped under the inside day and tested the 50 DMA. Distribution day in volume. Holding the 50 DMA

Dow (DIA) Gapped under the 50 DMA and was unable to climb above. Distribution day in volume.

Nasdaq (QQQ) Gapped under the inside day. But stayed well above the 50 DMA. Distribution day in volume.

ETFs:

XLF (Financials) Closed under the 50 DMA, bringing this into an unconfirmed warning phase.

SMH (Semiconductors) Gapped under the 50 DMA and is now in an unconfirmed warning phase.

XRT (Retail) Gapped below recent support but, is holding the upward sloping 50 DMA.

IYT (Transportation) Closed under the 50 DMA. Now in an unconfirmed warning phase.

IBB (Biotechnology) Gapped below recent support but, is holding the upward sloping 50 DMA.

IYR (Real Estate) Watch for 62.70 to hold. Testing the June lows.

XHB (Homebuilders) Fared well with TBT dropping. Accumulation day in volume. Watch for the 200 DMA to hold.

GLDGreat move today! Accumulation day in volume.

USO (US Oil Fund)Grinding higher. 38.41 is the next hurdle.

OIH (Oil Services)Closed under the 10 DMA, but held recent lows.

XLE (Energy) Gapped lower this morning but, holding the 50 DMA.

TBT (Ultrashort Lehman 20+ Year Treasuries) Gapped higher, then corrected to R2 and closed near the opening price. Closed at new yearly highs.

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