Getting Into Hot Water, Keeps You Clean

July 29, 2014

Mish's Daily

By Mish Schneider

The information I wrote last night concerning buying dips with certain confirmations in place, I hope was useful in tracking the small caps or Russell 2000s during Tuesday’s session. If nothing else, it might have prevented you from selling on the open and actually looking at the possible buy opportunity.

With that said, this market as I also wrote about, has been tough to navigate because of so many conflicting factors-to name a few:

  1. Geopolitical situations-Russia/Ukraine (with more sanctions placed upon Russia), Israel/Palestine, Libya stirring up.
  2. Mixed economic signals-weak housing data, strong jobs data-with a lot of numbers coming up.
  3. Great earnings on many reporting companies at the same time, a market which is clearly running rich
  4. Historic diversion among sectors and groups, i.e Homebuilders in the toilet while Real Estate remains close to the highs.

The US dollar has risen to a 6-month high. China, although a bit overdone now, has performed incredibly well. Interest rates are at a 2014 low.

And by the way, with all the noise, IWM (Russell 2000s) confirmed the distribution phase-weakness and caution prevail!

S&P 500 (SPY) Under 196.50 expect to see the 50 DMA at 195 area

Russell 2000 (IWM) 112.20 the low to break with a move over 114 a giant relief for a start

Dow (DIA) Next visit to the 50 DMA will most likely pierce it

Nasdaq (QQQ) Still sideways and best bet especially with the strong Twitter after hours move on earnings

XLF (Financials) 22.65 the 50 DMA

KRE (Regional Banks) Not ready yet. Inside day

SMH (Semiconductors) May have to fail the 50 DMA next time and see how it acts around 48.40

IYT (Transportation) Dropped to the 50 DMA

IBB (Biotechnology) A good performer on a down day

IYR (Real Estate) 73.00 pivotal and can also be seen now as resistance with the inside day

ITB (US Home Construction) 22.58 the 2014 low

Metals and Mining (XME) Doji day and probably one to watch

TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs no stopping this with FOMC tomorrow

UUP (Dollar Bull) New 6-month highs

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