May 15, 2013
Mish's Daily
By Mish Schneider
I wonder how many are caught by surprise that the idea of the Federal Reserve backing away from bond buying and a strong US dollar would lead to the market making yet another new high. Defies logic, some would say; but whose logic? We saw the FED’s musings as an opportunity to shop in the riper sectors like Financials, Transportation and Retail. But, as it turned out, traders could have shopped pretty much anywhere with a few notable exceptions-gold, Apple, oil. So what now? The Runaway gap featured as a powerful chart pattern back on May 3rd has been amazing. The Russell 2000 got to the target I have been writing about as well as the Dow, S&P 500 and NASDAQ –or close enough. Of course, profit taking is never a bad idea, making sure core positions are left on to run their course. It may also be time to start thinking about a hedge if actively long. One place to look at is VXX (The Implied Volatility of the S&P 500 Index.) That is at historical lows.
S&P 500 (SPY) Got to the top of a weekly Bollinger Band. Could mean nothing since the momentum is still quite strong. At the very least, anyone late to the party-well, you’re late!
Russell 2000 (IWM) 97-98.00 was my reasonable target with today’s high 98.03.
Dow (DIA) Got to a target today. Now, there is a big difference in predicting a top versus knowing when the risk is crazy. Yup, the latter.
NASDAQ 100 (QQQ) 74.00 a target with today’s high 73.74. But no reason 77-80.00 not in the cards only AAPL might make that harder to achieve.
ETFs:
GLD Is it me or did this put in an okay performance considering how crushed it should have been? Of course, that’s a relative thought as it is in a bear phase after all.
XLF (Financials) 19.35 now support to hold
IBB (Biotechnology) What’s higher than 100% overbought on the weekly relative strength indicator? Like Spinal Tap can we get that amp to 11?
SMH (Semiconductors) 2 day correction with 38.00 support
IYT (Transportation) 116 target for now.
IYR (Real Estate) Housing starts coming up later this week
OIH (Oil Services) 45.12 is the 2013 high and if clears, a very bullish sign
XLE (Energy) Through 81.00 with little pain
TBT (Ultrashort Lehman 20+ Year Treasuries) WOW
XOP (Oil and Gas Exploration) 60.00 resistance cleared today breaking the lower highs pattern established this year
UUP (Dollar Bull) Made a new 2013 high today-22.90 area next resistance
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