Is it Safe? $SPY $QQQ $IYM

March 8, 2012

Mish's Daily

By Mish Schneider

Did you keep in your minds that the trend remains bullish and look for the signs that it was safe to jump back in? I wrote up 3 possible scenarios. 1. Watch for a return move over the high of the gap down day to follow up. 2. Keep a cash position until the market tests a major moving average (such as the 50 DMA) establishing a support area. 3. Wait to see if the market gaps higher tomorrow. What about the featured trade in Semiconductors (SMH)? My subscribers bought early, locked in profits and kept a partial position.

S&P 500 (SPY) 136.28 fills the gap and now anticipating that Tuesday low will hold if the market has a chance to play out scenario 3.

NASDAQ (QQQ) Wrote that the Scenario 1 would work best in this index. It did and ran to the 10 DMA.

Russell 2000 (IWM) Inside day and close on the 50 DMA. One could make a case for digestion here.

ETFs:

GLD Unconfirmed phase change back to warning. Needs a second close over the 200 DMA to confirm.

XLF (Financials) A gap above today's high would make this happy. Otherwise, 14.39 support and a second weekly close over 14.71 the confirmation of a reversal of the 5 year downtrend

IBB (Biotechnology) Inside day which means good one to follow the way the range breaks

SMH* (Semiconductors) Wasn't the strongest of all the sectors, but was the second strongest.

IYT (Transportation) Still in a weak warning phase.

IYR (Real Estate) Over 60.45 area- a good group to look at.

USO (United States Oil Fund) Was a perfect trade based on Strategy 1 described above. Watching to see what happens at 41.05

TBT (Ultrashort Lehman 20+ Year Treasuries) The first day I did not get long, I'm sure upsetting the brokerage firm who by now, is used to receiving its daily commissions. But that doesn't mean I've stopped shopping for the bottom.

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