I Say High, You Say Low

March 10, 2014

Mish's Daily

By Mish Schneider

“Hello, Goodbye” The Beatles

So let’s continue our discussion about this patience thing. The market certainly tried ours day one into the week.

Furthermore, let’s examine the Russell 2000-after all, that is the instrument that exhibited ginormous volume last Tuesday. Four possible scenarios prevail.

1) The blow off top pattern is still playing out-although possible, I would have expected a weaker close at least under the fast moving average.

2) The market is digesting the recent rally through time rather than price-looking more feasible as the trading range from Tuesday remains the trading range of the last 4 days following last Tuesday.

3) The market is digesting while it works off overbought conditions, and pretty much will continue to be range bound for a while longer-also possible especially given the Russian wildcard.

4) The market is not merely digesting, but fueling for a blast off from last Tuesday’s high with much higher levels to come-that could also come to fruition on the heels of some good economic numbers and a soothing Janet Yellen regarding bonds.

Regardless, the operative word is patience. No runs, hits or fouls.

S&P 500 (SPY) Low volume digestion day holding support

Russell 2000 (IWM) Held 118. Keep watching

Dow (DIA) Gets through 2014 resistance and everyone will feel a lot better-the bulls anyway

Nasdaq (QQQ) Check out 90.80 as a place to clear Tuesday

XLF (Financials) Hardly budged-supports new high possibility

SMH (Semiconductors) Resting

IYT (Transportation) Shooting stars-big eyes

IBB (Biotechnology) Inside day resting

XRT (Retail) Held up really well and looks like a good place to look for higher

GLD Chop chop.

XLE (Energy) Has to clear 88.54 once and for all

TBT (Ultrashort Lehman 20+ Year Treasuries) Inside day. TLT Confirmed a phase change to bullish

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