October 26, 2011
Mish's Daily
By Mish Schneider
Read on twitter today that besides the leading stocks, 70% of the S & P 500 stocks have had good earnings in the 3rd quarter. That explains a lot of the divergence traders are experiencing. Again I preface this with “I’m no economist,” but if you take the Europe rumor mill out of the equation (ok fantasy), and look at how midcaps are doing (companies whose total market capitalization is between 2 billion and 10 billion US dollars) and small caps (between 300 million and 2 billion), so far not that bad, right? Please, if you are indeed an economist, feel free to enlighten us.
Technicals are mixed making this a really tough environment. Slope on the 50 DMA in SPY has declined although price is above along with a positive phase and volume patterns good (another accumulation day today.)
Big note: If SPY closes above the 80 monthly moving average by end of the week, will be the first time since July.
IWM slope on the 50 DMA is intact with its 4th accumulation day in volume. QQQ is in the strongest phase with positive slopes on the longer term moving averages up although with the recent poor earnings in AMZN and AAPL, 2 distribution days in volume in a row. Getting a headache?
ETFs:
GLD Back to low volume but could be a digestion as it is approaching overbought. Overhead at the 50 DMA 169.25 with gap, should it get really going, at 172.20.
XLK* (Technology) Held the 200 DMA and not overbought.
SMH (Semiconductors) Still could not clear the 200 daily moving average. Prefer to look at XLK right now.
XRT (Retail) Subs: 52.23 negative pivots to hold. Over 53.30 R1 good for this group
IBB (Biotechnology) Has not closed above the 200 DMA since early August. Needs to get in gear for sustained rally
XLF (Financials) Held 13.00 again. 13.48 next hurdle. Lots of noise in the middle
OIH (Oil Service Holders) Still under the 70 EMA but gathering steam.
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