November 4, 2012
Mish's Daily
By Mish Schneider
Although neither as sobering nor tragic as Sandy, one does have to assess the Friday damage to the market and look forward with a logical plan. Of course, with US Elections on Tuesday, all plans are subject to change; therefore best plan heading into this week is mainly cash. Market Internals indicate S&P 500 to be short term positive, long term neutral. NASDAQ internals indicate both short and long term neutral. And the VIXX is in the bullish zone. The SPY is hovering around levels seen in 2008 before the crash. What held and are the first places to look? Financial ETF 16.00 (closed marginally under at 15.97) support, Real Estate, Retail and Semiconductors fast moving average support. Bearish engulfing patterns SPY and QQQ with Friday's move lower. The SPY and Russell 2000 ran right up to the 50 DMA resistance and turned back as if to say "Never mind." More details below:
S&P 500 (SPY) Distribution day in volume. Best I see is that it held the week of 10/26 low at 140.39. Begins the week with a serious limp, but with some physical therapy, not so crazy to also keep open to a rally.
Russell 2000 (IWM) Nasty candle but at least after a huge surge in volume on Thursday's up day, Friday's decline had comparatively little. But, 80.56 is the 200 DMA and unless it can get back over 81.90 area, seems that we shall see that and possibly worse.
Dow (DIA) Never made it to the 50 DMA and real close to the 200 DMA
NASDAQ 100 (QQQ) As written last Thursday coming into Friday, the low volume bounce off of the 200 DMA meant we had to see buyers in AAPL and GOOG. Now, with a close on the 200 DMA and no cooperation from the big guns, unless SPY takes off, this looks sure to break the 200 DMA and at the least, test the 10/26 low 65.35.
ETFs:
GLD Gapped lower and kept going south.161.50 its 200 DMA.
XLF (Financials) 16.00 was basically defended after it jumped off the 50 DMA on 10/26. Either this takes back a lead or bye bye 50 DMA next time. Subs: Pivots Positive
IBB (Biotechnology) The end of a year long run.
SMH (Semiconductors) Tried so very hard to hold that 65-weekly moving average. Alas, back in a unconfirmed bearish phase which means it has to clear last week's high or 28.50 not out of the question.
XRT (Retail) Besides Financials, the best hope after all the good economic numbers last week. It held the 50 DMA which means, along with the fins, is the other bullish sector to consider.
IYT (Transportation) In your face 200 DMA as it runs back to the 50 DMA bench
IYR (Real Estate) Cleared and held 64.45 an area which kept the oxygen flowing. Also an interesting looking hammer candle. Gotta keep eyes here as well as on fins and retail.
USO (US Oil Fund) Declining oil.
OIH (Oil Services) Under 38.18 not too pretty
TBT (Ultrashort Lehman 20+ Year Treasuries) Basically closed on the 50 DMA making this a wildcard
Every day you'll be prepared to trade with:
