No Bias

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Today's Mish's Daily was prepared by Geoff Bysshe, co-founder of MarketGauge.

The SPY's have now seen 3 days in a row of a 1% or more move in the opposite direction of that day before. Furthermore, it's tapped a higher high and lower low each time creating a broadening pattern of chop rather than a more constructive compression pattern.

The other indexes have different patterns but they're not much better. I'm going to continue to expect more choppy action that could leave the market at its high or low by day's end.

S&P 500 (SPY) When markets travel in such wide ranges back to back I have less confidence in the support and resistance levels within the range. Focus on the pivots and the opening range levels.

Russell 2000 (IWM) Did you notice it peaked at the close of Friday (90.37)? Almost feels like a market that just wanted to prove it could get back to where it gapped down from. 90.70 is the high, and on the downside the 89.90 level is where I'll be cautious.

Dow (DIA) After the initial first 30 minute run up it just went sideways. The afternoon range defines the levels to focus on.

NASDAQ 100 (QQQ) In the last three days it has traveled the range of the year. The range isn't that big, but it's a good example of my comment in the SPY's above - after back to back wide ranges days don't expect there to be much support or resistance with in the range.

GLD Again... No change from Monday's point of view...Trapped between the 200 and 50 DMA. I think that if you want to trade this right now on the long side you should consider SLV instead - the chart is cleaner. Either way, I'd wait for a break of the last three day range for a momentum trade.

SLV (Silver) The only way for this to stay in the wedge is for it to not trade! Same thoughts as Monday and Friday's comments, but now it's more compressed.... The wedge beginning in mid-January defines the tipping point of a multi-day wedge. Therefore, a break of this range could lead to a nice directional move. I'll only trade the long side move and 31.22 and 31.41 are key levels to break with a target of 32.40. Subs: look at the 60 minute chart and you'll see the wedge. Draw the trend line from the Sept. 2012 highs and you'll see the target area.

XLF (Financials) A healthy recovery today. 17.50 continues to be a pivotal level that could be used for reversal trades.

IBB (Biotechnology) Inside day sitting on support. Has the potential to go either way but if the market is positive this is a good place to look for a long but don't chase it.

SMH (Semiconductors): It had a nice strong day as expected with an up market day. It's not running away but its strong. I prefer to buy weakness rather than a breakout.

XRT (Retail) A big volume come back to close over the swing high. 67.20 should be good support now.

IYT (Transportation) 102.50 is the key support and 104.65 is a big breakout.

IYR (Real Estate) Has a tight 4 day range that is right under the 10-DMA. It could have a nice move in either direction when it breaks out of the range.

USO (US Oil Fund) It looks very undecided, but after today's tight range it could move nicely in either direction when it breaks today's range.

OIH (Oil Services) Another consolidation day. Monday's high at 43.86 is the level to break for a move higher. Look at the weekly chart. Draw the wedge resistance line from the 2/24 high (let it also extend back to the week of 8/19/2012. It may be a rough ride up but there's big potential here.

XLE (Energy) 78.20 is the big number to break on the upside, then 78.60. Look for support at today's low of 77.56. Watch this and OIH together.

TBT (Ultrashort Lehman 20+ Year Treasuries) 68.72 is the important level to break on the upside and 68.20 should be support..

XOP (Oil and Gas Exploration) Big up day took out the swing high from last week, I'll look for and OR reversal on the long side here.

XHB (Homebuilders) The low of the day, 28.25, is at the 20 DMA so this is a good place to watch for a break in either direction with the upside level to break being 28.82. The next level lower is the 28.00 level.

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Best wishes for your trading,

Geoff Bysshe
President

For more detailed analysis join me, along with hundreds of other subscribers, at Mish's Market Minute and get my daily trade picks, trade alerts, training videos, and exclusive analysis tools. Sign up for Mish's Market Minute now and get a free 2 week trial!