September 24, 2013
Mish's Daily
By Mish Schneider
Quote by Steven Wright
When I woke up Tuesday morning, I felt so relaxed. My portfolio had tails left of a few positions all deep in the money and with little risk exposure. I felt ready for anything. Then there was the plan to only look for strength after the recent correction as long as the risk was in line. Furthermore, I instructed my subscribers to not bottom pick, rather, see that as a sign of further weakness to come. I also gauged the pulse of the day on 3 factors-the small caps or Russell 2000s. They had to hold the fast moving average and run up to give me confidence. Second, I watched the real estate and financial ETFs-both of which were down and remained so throughout the day. Finally, there were the long bonds-if rates continued to drop, then I would perceive that as both bad and good news, meaning, the FED is keeping the juice flowing while investors are viewing the economic condition as weak. Bottom line is this. The plan right now is to take it easy! Just proofreading my plan, my relaxed state starts to slip away. I can see that the variables are numerous and out of synch. One index does well, 2 sectors do not do well, rates drop-it’s enough to make any active investor’s head spin! My advice now? Heed the warning of the financial sector, keep hope alive with the small caps, but trade anything new light and tight.
S&P 500 (SPY) Law of attraction looks like the 50 DMA is next. That would change if it clears Monday’s high
Russell 2000 (IWM) Easier to gauge this now based on Monday and Tuesday’s lows. If they fail expect more weakness all around. If not, don’t get too caught up on the short side.
Dow (DIA) On the 50 DMA-no surprise really considering this was so close to it coming into this week. Now, if holds good. If not, expect a domino effect
Nasdaq (QQQ) Inside day. That means under Monday’s low trouble. But if can clear 79.50-back to a leading position
ETFs:
XLF (Financials) Warning phase now. Unless it clears back over the 50 DMA, stay clear.
SMH (Semiconductors) The new IBB of 2013?
XRT (Retail) DOJI holding the 10 DMA. Also key so watch this too.
IYT (Transportation) Held Monday’s low making that important now
IBB (Biotechnology) Inside day.
IYR (Real Estate) Bear phase confirmed with 63.85 the place to see hold
XHB (Homebuilders) Nice day thanks to Lennar
OIH (Oil Services)47.00 area of support
XLE (Energy) Topping candle from last week still a factor even if 84.00 is interim support
XOP (Oil and Gas Exploration) Made a move but didn’t close as well as it should have all things considered-mainly the topping candle from last week
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