October 7, 2014
Mish's Daily
By Mish Schneider
Ms. 200 points is the new 100 points move in the market sure did not disappoint!
Lunar eclipse, blood moon, deflation and recession fears, start of earnings season, a REAL correction, gratification in having a smooth equity curve well outperforming the market with no heroics, FOMC minutes on Wednesday, matched record high on the long bond ETF-TLT, all indices in strong warning except for IWM, the harbinger when it went to bearish-if I could clean up this list and make it rhyme-I would have one heck of a rap song.
I wish I could tell you that the volume merited a possible blow off on Tuesday. Alas, I cannot since it measured as average to slightly above in all indices. A blow off requires 2-3 times the normal average daily volume.
What we have here is a failure-plain and simple. The phases in a cycle of decline as I have been writing about and regretting seeing since September when IWM could not make new highs.
Some folks go short, buy puts or ultra-short ETFs. Some choose to sit on the bench and raise cash. Others try to pick a bottom. Others still, daytrade or scalp and care little of market direction. Professional stock pickers lurk, waiting to strike when the iron is hot and the risk is minimal. If you’re as rich as Buffet, Soros or Icahn, you can afford to ride the elevator to the ground floor.
Sadly, many have no power to do anything at all but watch their buy and hold investment accounts deteriorate.
Regardless, we can count on selling rallies from here on in-or at least until something substantial changes.
“I'm waking up, I feel it in my bones
Enough to make my systems blow
Welcome to the new age, to the new age..” Imagine Dragons
S&P 500 (SPY) 192.35 last week’s low and 190.55 August low.
Russell 2000 (IWM) 106.94-107.27 are recent lows (going back to February) Therefore, a close above and we might see some relief. I am looking here for any signs of a bottom first.
Dow (DIA) Seriously, 166.43 was last week’s low and we are not close to the 200 DMA or August lows-but then again, reason to see a rally to sell
Nasdaq (QQQ) 97.75-98.00 was the high not surprisingly. 95.97 ast week’s low then its hello 94.00
XLF (Financials) 22.74 last weeks low
SMH (Semiconductors) 48.90 the low from last week-a gap below more damage in store. If holds and clears 49.50-a stretch, but anything is always possible
IBB (Biotechnology) Closed just beneath the 50 DMA. If there is a place to go long, even for a shorter time frame on a firming of the market, it’s here
XRT (Retail) It’s only October and already this looks like the Grinch who will steal Christmas.
IYR (Real Estate) This gets through 70.00 we can talk.
ITB (US Home Construction) Maybe double bottom-like to see even more evidence
GLD Over Tuesday’s highs 116.63 and expect a better rally at least to 118
FCG (First Trust ISE Reserve NatGas) So oversold and getting into 2013 prices-worth watching
TBT (Ultrashort Lehman 20+ Year Treasuries) Matched record high in TLT
UUP (Dollar Bull) 22.65 is the low of the most recent runaway gap
FXI (China Large Cap Fund) Outperforming so still watching
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