One Swallow Doth Not a Summer Make $SPY $QQQ $IWM $DIA

May 9, 2013

Mish's Daily

By Mish Schneider

The market got a glimpse of what havoc could be wreaked if the FED decides to reverse the Quantitative Easing Policy that has been in effect for quite some time. However, what could that possibly mean under the surface? For starters, it could mean that the rates will rise, along with the US dollar which indicates that the FED might have more confidence that the patient (The US Economy) can continue to improve without the IV drip. (Mission Accomplished to appropriate yet another hackneyed phrase!) Be that as it may, our job is not to judge what the powers that be do, rather to anticipate what impact that might have on the markets and in particular, which groups will do well and which ones will suffer. And most likely, nothing will happen other than a repeat of the usual-economy improving, will keep policy in place, until such time as-blah, blah, blah.

S&P 500 (SPY) One red day since last Friday doth not a top make. However, some healthy correction wouldn’t be so bad either. Until gap low from last Friday violated-noise.

Russell 2000 (IWM) 97-98.00 reasonable target it holds 95.00

Dow (DIA) 152-53 resistance and same deal with gap low as support to hold

NASDAQ 100 (QQQ) A chance today was a reversal candle, but unless it breaks the gap low at 71.91 hard call to make. 74.00 still a target

ETFs:

GLD A weekly close under 140.55 and the recent bounce from the lows could be history

XLF (Financials) 19.38 overhead resistance Inside day.

IBB (Biotechnology) With a reverse candle sitting at the recent highs, could be vulnerable if that does not clear

SMH (Semiconductors) Broke over an 11 year channel, but also a bit overbought now.

XRT (Retail) No runaway gap here so a good place to see how this recent move digests

IYR (Real Estate) Taking a breath

USO (US Oil Fund) As long as this holds the 200 DMA still in a more positive phase

OIH (Oil Services) 45.12 is the 2013 high