October 21, 2013
Mish's Daily
By Mish Schneider
A few considerations for active traders: 1. Lots of earnings this week-lots-which means besides the strong GOOG report from last week and this afternoon’s pop in NFLX-many small caps to S&P 500 stocks have yet to weigh in. 2. The intermediate term indicator (McClellan Oscillator) is on the cusp of a sell signal in the S&P 500. It didn’t signal as of Monday’s close because of the final push up, but worth watching for that if weakness prevails Tuesday. 3. The ultrashort TBTs confirmed the reversal pattern established last Friday. That snowballed into a selloff in Real Estate and Homebuilders. 4. Tuesday brings the jobs report ahead of the opening.
Oil also got hit. If history repeats itself, the dominoes effect of higher rates can strike other areas of the market as well. Otherwise, it was an inside day in the Dow (when the trading range of the day is inside the trading range of the day prior). NASDAQ reigns supreme holding the runaway gap from last Friday. The small caps are holding their runaway gap, but Friday’s low is not that far away. The S&P 500 digested with a doji day. Transportation and Semiconductors are where it’s at. Biotechnology continues to exhibit faded glory. Mixed bag.
S&P 500 (SPY) 173.50 Friday’s low is key to hold.
Russell 2000 (IWM) 109.83 is last Friday’s low. Although the market remains strong, a break and close below that level-fair warning.
Dow (DIA) Laggard-and for good reasons-IBM! The last big rally that peaked in September, this was the first one to falter. So, keep eyes here
Nasdaq (QQQ) NFLX-I salute you today
XLF (Financials) Doubtful 20.96 is a double top, however, with an inside day, an interesting range break to follow
SMH (Semiconductors) New highs, holding the runaway gap
XRT (Retail) Digestion
IYT (Transportation) New 2013 highs again
IBB (Biotechnology) 202.00 is the 50 DMA to hold
IYR (Real Estate) Could be just a retreat from the 200 DMA to fuel up for a push beyond. A lot will depend on rates
XHB (Homebuilders) Closed right on the 200 DMA and huge inflection point
USO (US Oil Fund)The 200 DMA is coming up
OIH (Oil Services)Could be a brick wall high-another aspect to be concerned with.
XLE (Energy) Another possible reversal from the highs
XOP (Oil and Gas Exploration) The candle on this one is also alarming if confirms with more downside.
EWG (Germany) New highs by one tick
FXI (China) Like 38.00 as support to hold
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