August 11, 2013
Mish's Daily
By Mish Schneider
This low volume week can be considered one of choppy digestion and correction. The indexes drifted lower however, I’m not getting overly bearish at this point. Although, I am exercising caution and closely watching the support levels in the four major indices. The S&P 500, Russell 2000 and the Dow Jones Industrial Average all closed under the 10 day simple moving average, but are holding support levels.
I don’t see this as anything to be frightened of as long as the markets hold support. See this week's Outlook Video for more detailed look at some warning signs to watch for if the markets start to slide.
It's likely that we'll see more of the typical low-volume chop that is characteristic of summer trading. Make sure you trade instruments with good volume to avoid getting caught up in any messes.
GLD is a particularly interesting ETF to keep an eye on, as it is flirting with the 50 DMA and may soon change phases.
In the upcoming week, watch how the four major indices react to the 10 DMA and how they hold their lines of support.
Subs: Pivots in all 4 indexes are now negative. Watch for R1 to break for a more bullish outlook.
S&P 500 (SPY) Holding moderate support at 168.50. Under the 10 DMA.
Russell 2000 (IWM) Beware of weakness below 104. If 104 breaks, the next support is 103. Below 103, could see a test of the 7/11 gap at 101.94.
Dow (DIA) Nearly filled the gap from 7/11. If 153.29 breaks, this could test the 50 DMA.
Nasdaq (QQQ) Under pressure but holding up well. The 10 DMA needs to hold.
ETFs:
XLF (Financials) Inside day, under the downward sloping 10 DMA. Watch the range break either way.
SMH (Semiconductors) Closed under the 50 DMA, bringing this into an unconfirmed warning phase.
XRT (Retail) Low volume sideways action. Under the 10 DMA.
IYT (Transportation) Holding support around 115.75 but closed under the 10 DMA.
IBB (Biotechnology) 193.86 is an important area to hold.
IYR (Real Estate) Nice move up today but is now approaching resistance.
XHB (Homebuilders) Choppy sideways action.
GLD Trying to break through the 50 DMA. This remains in a bear phase.
USO (US Oil Fund) Gapped higher and continued to rise. Closed over the 10 DMA.
OIH (Oil Services) Holding the 10 DMA. Recently over the 80 monthly.
XLE (Energy) Inside day.
TBT (Ultrashort Lehman 20+ Year Treasuries) Sliding lower and choppy. Although, the upward sloping 50 DMA is catching up to the price.
UUP (Dollar Bull) Holding the June lows.
EWG (Germany) Subscribers: Inside day
FXI (China) Subscribers: Confirmed the Recovery phase and cleared the 10 DMA.
EWW (Mexico) Subscribers: Inside day, sitting on the 200 DMA.
SGG (Sugar) Subscribers: Nice move today. 59.55 is the next hurdle.
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