April 5, 2014
Mish's Daily
By Mish Schneider
I read somewhere that it’s been over 20 years since the S&P 500 futures came within spitting distance to a new 52-week high while NASDAQ got hit with its worst loss in a year.
Regardless whether that statistic is completely accurate, the bigger point clearly is the divergence which has become the theme of 2014. Not only a theme, but a trading strategy.
Just a short time ago, I wrote that while NASDAQ and the Russell 2000s were in a warning phase, the S&P 500 and the Dow held onto their bullish phases. Furthermore, I became troubled after March 3rd when the small caps made a new high on triple the average volume-blow off top material.
This past February, just the opposite was true. The Dow fell to a nasty Distribution Phase while NASDAQ barely broke the 50 DMA holding onto a weak warning phase.
If the market could be represented by a bobblehead, it would be sitting on your desk, bobbling with one of those s**t eating grins.
For us, this has been the year of the soft commodities. We have traded equities, but not nearly as much as we did last year, and always with a core position in corn, coffee, oil and/or gold.
This week, assume the market has little fight left and that rallies will be met with selling. If SPY and DIA gap lower, assume selling weakness is ok too. Only new highs in EVERYTHING will bring back major confidence. At least with me.
S&P 500 (SPY) Time to remind you that the 50 DMA is at 183.90
Russell 2000 (IWM) Unconfirmed warning phase although confirmation seems likely
Dow (DIA) Big reversal candle and last vestige of support from Friday’s lows which if gives that up, 161.20 here we come
Nasdaq (QQQ) It looks pretty awful. Just a couple of weeks ago I was writing about the underlying weekly moving average at around77.50.
XLF (Financials) Not what I wanted to see-but has support on the way down
SMH (Semiconductors) I hate seeing a weekly piecing of a Bollinger band only to see a weekly close below. Typically means top in-at least for now.
IYT (Transportation) Ditto here as semis only this held up a bit better
IBB (Biotechnology) Don’t say I didn’t warn you
XRT (Retail) This is where I want to watch-will the retailers keep hope alive?
IYR (Real Estate) This hasn’t been up long enough to get real bearish-but-that doesn’t mean it can’t go down.
GLD 125.50 or 121-what will see first? 125.50 we can now say. Many gave up on that golden cross-now it gets interesting
USO (US Oil Fund) Confirmed accumulation phase. Now this too gets interesting
XLE (Energy) Our portfolio has hit two profit targets here so now we ride out the tail with a good stop
TBT (Ultrashort Lehman 20+ Year Treasuries) 67.00 support to watch
PHO (Power Shares Water Resources) Proof that technical outweigh everything-we can’t live w/o water-yet, this got hit too
UUP (Dollar Bull) Will wait to see if 21.50 holds
KRE (Regional Banks) The strong, silent type that got hit in the head
JO (Coffee) Subscribers: Missed the blast off on Friday-now watching to see if it holds 36.20 and if not, 35.00
Every day you'll be prepared to trade with:
