May 8, 2012
Mish's Daily
By Mish Schneider
The initial weakness in the day certainly no surprise, but the real question is whether the end of day rally and hammer candle left in S&P 500, NASDAQ and the DOW is a reversal with more upside to come given the weak warning phases? Russell 2000 tested and held a major weekly moving average. The financial sector held 15.00 (XLF) and Real Estate (IYR) held 63.00 closing virtually unchanged. Volume spiked in the SPY leaving a second significant distribution day. I would have preferred the volume spike and a green close, but one thing is for sure; after testing the recent highs, now lows, market will soon prove itself much bigger one way or the other. Wednesday could be a major key as to which way.
NASDAQ 100 (QQQ) No volume spike but a hammer candle with resistance just overhead. Big eyes here before we get too excited about any rally turning out as anything more than a good sell opportunity.
GLD Short paid off with cover today as it approaches oversold. But will look for another opportunity as 155 support will not hold the next time
XLF (Financials) 15.00 swing area. Longer it holds the better the chances for the market. A failure and see a test of the weekly moving averages below
IBB (Biotechnology) Once the VRTX news runs its course, possible this has seen the highs for now. Only way to alter than bias is if the recent highs are taken out
SMH (Semiconductors) Oversold and got close enough to 32.00 to assume a bounce to 34.00 very possible
XRT (Retail) If the market can rally, this has to come along or rather start leading again. That means a move back over 61.25 or trouble still lurks
IYR (Real Estate) Over 64.20 and this gets exciting
USO (US Oil Fund) Looks better Over the 200 DMA
XLE (Energy) 69.45 overhead resistance
TBT (Ultrashort Lehman 20+ Year Treasuries) Watch 18.05
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