Is "Oversold" Enough

---

Today's Mish's Daily was prepared by Geoff Bysshe, co-founder of MarketGauge.

The The oversold conditions finally provided some relief for the bulls on Friday. There was also a little help from news out of Washington. Together these enabled the markets to close near the top of their daily range for the first time in 7 trading days. Finally.

However, the bad news for the bulls is that there wasn't any sign of capitulation, and at the end of the day the price action across the market markets indexes was not convincingly bullish. We may be able to point to good reasons for the market to move up this week becuase it is oversold, but the bulls will have to watch their back - the bears are still very much in control.

S&P 500 (SPY) Outside day, and nearly a key reversal on decent volume. Expect resistance at 137. There could be good support at 135. Subs: pivots are positive.

Russell 2000 (IWM) Has a Slingshot bullish reversal pattern combined with a key reversal pattern. 76.50 and 76.00 should be support. Expect resistance at 78.50. Subs: pivots are positive.

Dow (DIA) Very oversold but price action was weaker that the other three 3 indexes so I'll just watch the DIA. In needs to at least clear 126 then expect resistance at 127. Subs: pivots are still negative

NASDAQ 100 (QQQ) Tried to break Thursday's high but stopped just short. The 2 day high to break is 62.50 then 62.80 is likely resistance. Support should be in the 61.80 to 61.60 area. Pivots are still negative.

ETFs:
GLD Unlike stocks, it was completely disinterested in what Washington D.C. had to say. Inside day looks like it could break either way.

SLV Still holding its 10 DMA. Looks like it's trying to turn back up, but I'd like to see it clear Friday's high before looking at it long.

XLF (Financials) Sitting right on the 200 DMA and tested it on Friday. 15.30 is the high of Friday and Thursday. If the market moves over these highs the 15 level could be a good stop for a swing trade. 15.38 is significant resistance so it's not likely to be an easy ride up.

IBB (Biotechnology) Another strong day on Friday created a bullish looking formation over the last 6 trading days on the 200 DMA. I'll be looking at this and biotech stocks for long opportunities.

SMH (Semiconductors) it recovered nicely, but it was one of the weakest groups until the market turned, and it remains weak. There are better places to spend your time.

XRT (Retail) Friday was a good consolidation day right on the 200 DMA. If it breaks 60.60, it may rally.

IYT (Transportation) At its LOD it was down for the year! It recovered to close over the 86.60 area and inside its multi-month range. I don't see any reason to touch it in either direction yet, but the location is interesting.

For more detailed analysis join Mish, along with hundreds of other subscribers, at Mish's Market Minute and get my daily trade picks, trade alerts, training videos, and exclusive analysis tools. Sign up for Mish's Market Minute now and get a free 2 week trial!

Best wishes for your trading,

Geoff Bysshe
President!

For more detailed analysis join me, along with hundreds of other subscribers, at Mish's Market Minute and get my daily trade picks, trade alerts, training videos, and exclusive analysis tools. Sign up for Mish's Market Minute now and get a free 2 week trial!