July 11, 2013
Mish's Daily
By Mish Schneider
A market in momentum, right? Breaking News-“Dow and S&P 500 finish at record highs as investors hope Fed will continue stimulus; Dow adds 171 points, S&P up 1.4%.” It’s been awhile since I’ve written about the technical bubble-but let’s revisit. Take the small caps, Russell 2000-my particular favorite “tell.” If you locked yourself in a closet with a computer and watched no news at all, on May 22nd, you would have seen the reversal from the all-time highs on super good volume and liquidated longs, maybe even looked for shorts. Then, on June 25th, you would have seen that the day prior it exhausted the correction with again super good volume and followed through with an up day. Back long. Then, on June 27th, you would have seen the confirmed phase change to bullish-more long. Currently, you’d be looking for topping action and without ever hearing one word from the Fed or hopeful investors, you’d be sitting pretty, taking profits and looking for signs that the party is over. Therefore, the bubble in the punchbowl (or the closet if you will) is where the best traders live!
S&P 500 (SPY)169.07 that same May 22nd high that Russells took out days ago. Either a place that will haunt us or yet another platform
Russell 2000 (IWM) Gap lower would be suspicious but if not, digestion would be healthier
Dow (DIA) )155.14 the May 22nd high
NASDAQ 100 (QQQ) Took out the May 22nd high and we like to see leaders lead
ETFs:
XLF (Financials)20.35 the 2013 high-big earnings here coming up
SMH (Semiconductors) Confirmed phase change to bullish with 39.29 the 2013 high to clear
XRT (Retail) wow!
IYT (Transportation) Lagging-a sign of pending weakness, or just needs to play some catch up?
IBB (Biotechnology) The darling still the darling and on new highs
IYR (Real Estate)Inside day with67.40 the 200 DMA to clear
XHB (Homebuilders) Loves the hopes for continued low rates-but still has overhead resistance making this a place to watch should Fed get to talking tapering again
GLDGlorious trade this week-now looking at 126 level if can hold today’s lows
XOP (Oil and Gas Exploration) Like this better if can clear 61.82
TBT (Ultrashort Lehman 20+ Year Treasuries) 74.50-74.73 daily chart support
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