February 26, 2013
Mish's Daily
By Mish Schneider
Lesson learned is to respect brick walls, especially when they happen in the Russell 2000-small caps or the index that led the whole way up. Another lesson is in following the flight to quality in interest rates. They dropped significantly ahead of the sequestration as if all of a sudden investors got a clue that perhaps the cuts cannot be resolved. But last minute is how they play on Capitol Hill, which means, anything can happen. Therefore, watch both the Russells and the rates with the same scrutiny as Sherlock Homes with his magnifying glass.
S&P 500 (SPY) Lots of buzz about 3 distribution days in volume since making the highs last week. In our research, 3 or more within a 2-week period is a warning sign. Couple that with a slingshot high and an uncertain political climate and whammo. But, the phase remains bullish as long as SPY can hold the 50 DMA.
Russell 2000 (IWM) 87.75 is the 50 DMA. 91.00 now significant resistance
Dow (DIA) Cleared the 2013 high early on then turned on a dime, taking out all the work from February in one full swoop. 135.90 is the 50 DMA
NASDAQ 100 (QQQ) Back in an unconfirmed weak warning phase with the 50 DMA 66.68-now pivotal.
GLD Not a surprising bounce here given the gap higher oversold conditions and 2 inside days. 156.00 resistance.
XLF (Financials) Real close to the 50 DMA 17.11. A failure of the current bull phase will be reason to think this can see Jan lows 16.74.
IBB (Biotechnology) 143.44 the 50 DMA.
XRT (Retail) Never cleared the67.75 resistance and now looks like 65.00 the 50 DMA is in the cards
IYT (Transportation) Could not clear the brick wall highs but still a good place to look for a long entry once dust settles.
IYR (Real Estate) 66.60 the 50 DMA and another tell last week after it made new highs and could not hold up
XLE (Energy) 75.10 the 50 DMA to hold
TBT (Ultrashort Lehman 20+ Year Treasuries) Can finally say it broke the candle form February 1st after 14 days trading within it. Only, alas, it broke to the downside.
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