September 18, 2013
Mish's Daily
By Mish Schneider
Ever since the Labor Department reported the lowest participation rate in employment since 1978 followed up by a weaker than expected retail sales last week-it seemed clear that buying the bull phase and the comments I’ve been making about the trend pointed to exactly what the FED did today-no TAPER! The only folks still spooked by that possibility had been the media-oh yes, and the perma bears who love to call tops. Ouch! So, why would tepid economic numbers lead to this rally and the recent rally in general? Traders counted on a dovish FED to keep the economy moving in the right direction. And so they did not disappoint. The biggest percentage gainer post FED was GLD. It soared leaving the island bottom I have been writing about as a warning to not get short in spite of its recent sell off. Blast off to an unconfirmed recovery phase with the 129-130 levels key areas to watch hold. Now, I never got much longer in our portfolio since the beginning of this week and in fact, suggested taking profits, leaving trailing stops on balances. So, I will say this-Wednesday’s action in the S&P 500 and the other indices could very well be a blow off rally. Could be. Double the average volume on new highs? Let’s just say take it for what it’s worth-try to stay one step ahead instead of behind and let the market guide you!
S&P 500 (SPY) As mentioned, double the average volume on a huge run up-possible blow off or just the start of something bigger. Pick your spots carefully.
Russell 2000 (IWM) Not quite the same cache on volume-accumulation but not crazy huge. Watch here.
Dow (DIA) Volume spike and new highs. More importantly, noted the gap higher, the near inside day and the notion that something big was coming. 156.24 the old 2013 high to hold
Nasdaq (QQQ) Like the small caps, accumulation and not alarming volume on its climb to new highs. 78.70 now should act as support
ETFs:
XLF (Financials) Still has not gotten to the 2013 high from July-20.93
SMH (Semiconductors) If my world were semiconductors alone, I would say buy every dip!
XRT (Retail) Also has to clear 2013 highs 83.24-and my bet as the best one to do it if market holds
IYT (Transportation) New highs-no more double bottom fears and another place to look for opportunities longer term.
IBB (Biotechnology) Let this be a lesson to all who doubt a trend!
IYR (Real Estate) Unconfirmed phase change to recovery. Like to see some digestion against the 50 DMA now
XHB (Homebuilders) Blast off but not new 2013 highs yet
GLDI have a couple of favorite technical patterns and island bottoms is sure one of them.
USO (US Oil Fund)Unconfirmed phase change to bullish
OIH (Oil Services)New highs
XLE (Energy) New 2013 high and wrote a lot about 84.00 to clear
XOP (Oil and Gas Exploration) Beauty-been liking this too
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs Got right to the 50 DMA. 104 pivotal and above the 50 DMA might see more upside.
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