October 27, 2014
Mish's Daily
By Mish Schneider
Thomas Carlyle
If there is a calmness in life lived in gratitude, then it stands to reason that there is gratitude in a market that finally lived in calmness, at least for the day.
With many companies reporting this week plus the FED’s final meeting for 2014 coming up Tuesday and Wednesday, not surprising that the week began absorbing the wide ranges of prior weeks , thus reducing volatility.
The volatility index (VXX) continues to hold 32.50, a now fairly substantial support level that if breaks, could bring in end of month buying in the indices. Conversely, VXX over 35.35, we should see that sentiment quickly shift bringing back sellers, and exacerbating the nerves of an already nervous long crowd.
Encouraging that Regional Banks, Semiconductors, Real Estate, Transportation, Biotechnology and Retail all firmed. Moreover, the Financial Sector confirmed the Bullish phase.
NASDAQ (confirmed the Bullish Phase defending the 50 DMA) and the Dow closed slightly green. The Russell 2000 held 110, a now multi month pivotal point. The S&P 500 had an inside day (the trading range within the range of Friday) right beneath the 50 DMA. A gap above the 50 DMA and given the other positives, it will be for yours truly, a rare time this year that my confidence in the market as a whole will advance from tricks to treats.
Til then, we go back to where we began; “One cool judgment is worth a thousand hasty counsels. The thing to do is to supply light and not heat.” (Woodrow T. Wilson)
S&P 500 (SPY) The overhead resistance 196.81 (sloping up) at the 50 DMA is reachable. 194.50 the place to defend
Russell 2000 (IWM) 110 Pivotal, 108.80 support then 107 and overhead resistance at 112.15 (declining slope) the 50 DMA
Dow (DIA) The 50 DMA is 168.77 resistance with 166 the number to defend for sure
Nasdaq (QQQ) Confirmed phase change to bullish-98.02 place to defend
XLF (Financials) Confirmed phase change to bullish-23.10 to defend
KRE (Regional Banks) Good performance bullish engulfing pattern-eyes here over 38.00
SMH (Semiconductors) 46.96 the 200 DMA and overhead at 50.18
IYT (Transportation) Strong as expected
IBB (Biotechnology) Another new high
XRT (Retail) Looks like its consolidating over the 200 DMA 84.71 with 86.72 the 50 DMA to clear
IYR (Real Estate) Not quite new highs but getting closer
ITB (US Home Construction) Inside day and looking good over 24.26
USO (US Oil Fund) Now that everyone is so bearish, it seems that the new low and bounce could be bring more bounce
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs 120 pivotal unless this begins to break further below 118.70
UUP (Dollar Bull) A close this week over 22.76 is really good
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