Necessary Roughness $SPY $DIA $QQQ $IWM

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In Monday night’s daily, I wrote about Biotechnology and how we were on watch for the possibility of a key reversal day after Friday’s double the average blow off rally. Tuesday, a classic second indication of possible reversal in play occurred once again in the Biotechnology ETFs. It opened on new all-time highs and closed on the intraday lows as well as below Monday’s low of the day price. In the Russell 2000s, there was a similar scenario setup only with a couple of differences. IWM matched but did not take out the all-time high made Monday right on the Tuesday’s open and then closed on the intraday lows, but not below Monday’s low. The S&P 500 hasn’t traded near enough to the May 22^nd high, leaving that top in place. Therefore, Wednesday’s action should prove to be more decisive for next short-term direction. No doubt the market remains in a bull phase. As with all technical indicators, we will look for the necessary confirmation.

S&P 500 (SPY)169.07 the May 22^nd high is critical to clear or that topping action remains intact with Tuesday’s action reasons to think this can go back to around 165 fairly quickly.

Russell 2000 (IWM) I’ll give this a bit more leeway after today’s possible reversal-Thursday’s gap low 102.59. If that breaks, expect 100 pretty quickly. Then we’ll take another pulse.

Dow (DIA)155.54 the May 22^nd high looms above with last Thursday’s low 153.71 close.

NASDAQ 100 (QQQ) This made a new all-time high but did not close on the intraday lows. So, not great, but not nearly as ominous unless it gaps open lower or takes out today’s low and remains weak Wednesday

ETFs:

XLF (Financials)Held 20.35 a pivotal number as the old 2013 high-so for now, more like digestion than reversal if I had to take a guess.

SMH (Semiconductors) Semiconductors on the other hand, made a new 2013 high

XRT (Retail) This too has a possible reversal candle

IYT (Transportation) Left a bearish engulfing pattern in a group that was not close to matching the 2013 high from May

IBB (Biotechnology) As per above, tomorrow should be decisive one way or another for the short-term anyway

IYR (Real Estate)Floating, literally-last 4 trading days- above the 200 and below the 50 DMA

XHB (Homebuilders) Broke the 50 DMA (unconfirmed warning phase)

GLDAs long as 122.35 holds, an island bottom remains. Now, over 125, could see more upside

USO (US Oil Fund)Yet another possible reversal day-new highs, close on the lows

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