November 24, 2012
Mish's Daily
By Mish Schneider
After a consolidating session pre-Thanksgiving, post-holiday saw a gap higher and excellent follow-through. Apart from the gains in the indexes with NASDAQ percentagewise, the biggest gainer, the major sectors and groups firmed as well, although with divergence important to note. Retail, Semiconductors and Commodities (particularly SLV) related groups had the greatest gains while financials, transportation slightly underperformed. And most noteworthy is that real estate well underperformed. Since the gap higher that began last week, the price action yielded phase changes in S&P 500, and the DOW (DIA). In fact, the Russell 2000 ended just below its 200 DMA and NASDAQ still has room to go. Therefore, one has to be prepared that the rally to resistance is also a possible sell opportunity. It seems that watching leading stocks like AAPL, AMZN and GOOG will be an important clue
S&P 500 (SPY) Friday's low is now important support if this rally is to either begin the week with digestion or continuation. Another key is the declining slope of the overhead 50 DMA. That ultimately is the true test of how this year ends.
Russell 2000 (IWM) The 200 DMA is 80.50. All eyes will be there as we start the week. Any sign of weakness against the moving average could renew selling. Otherwise, watch for this area to clear or at the very least, see Friday lows and hold with some digestion.
Dow (DIA) 129.60 is the 200 DMA which either will hold and spur a run to the overhead gap 131.20 or, also viable that it will fail the 200 DMA and test lower levels.
NASDAQ 100 (QQQ) The gap high from 11/7 is 65.10. That is first resistance. Next, is the obvious 200 DMA 65.45. Friday's low becomes important to hold so traders can assess if the overhead resistance is a game changer or a good reason to think the rally will be short lived.
ETFs:
GLD The 167 level I wrote as the key area of support, held which spring boarded this to end the week on an unconfirmed return to a bullish phase. 169 the 50 DMA and key to hold
SLV Tweeted about the buy last Wednesday on the public stream. Now, unconfirmed bullish phase making the 50 DMA support 32.25 ad 34 the next objective.
XLF (Financials) This ran to and closed above the 50 DMA returning to an unconfirmed bullish phase. Market needs the fins happy, so watch for the 50 DMA to hold. Gap to fill above at 16.01
IBB (Biotechnology) Now, the 50 DMA is the moment of truth on this group that began this move higher before the others followed, but phase- wise, not the leader anymore.
SMH (Semiconductors) Ran to the 50 DMA but has to clear and stay there for the fun to continue.
XRT (Retail) The sector that had to lead and did its job. Now, 63.40 is a trend line from the all-time high made in September.
IYR (Real Estate) Cleared the 200 DMA for an unconfirmed phase change. 63.25 has to hold. This group still underperformed on a percentagewise basis on Friday.
USO (US Oil Fund) If cannot clear 32.53, will start to look for a new short
XLE (Energy) 71.05 first area of support to hold. Then, the 200 DMA. 71.90-72.00 next resistance
TBT (Ultrashort Lehman 20+ Year Treasuries) Interesting narrow range and underperformer on Friday. A major area to watch for confidence in whether investors will flock to bonds for safety, or continue buying equities.
Every day you'll be prepared to trade with:
