Oversold And Apathetic

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

The QQQ's weekly RSI is now at a level not seen since the dark days of the 2008 collapse. The biggest difference this time is that the market doesn't seem to care. Volume in all the indexes was above average but noteworthy. The price action was more of the same - choppiness that moves lower.

In the upcoming weekend Market Outlook I'll cover the oversold readings based on market breadth. The markets are all getting stretched into very oversold levels, but until there is some kind of positive price action there is no reason to try to pick a bottom yet.

S&P 500 (SPY) Into the gap from 135.26 to 134.56, but the bigger number to watch is the 133 area. Look for strong resistance at 137.40 area. Subs: look to sell a reversal, must get a positive daily pattern or pivots to consider anything long.

Russell 2000 (IWM) Stopped at support mentioned here yesterday (76.25 area). Let's see if it can consolidate. Strong Resistance at 78.60.

Dow (DIA) Now sitting on its 65-week MA at 125.50. It has decent weekly support in the 124 to 124.70 area

NASDAQ 100 (QQQ) AAPL broke its 5 day consolidation low and a major swing low from May of 2012. Watch this situation closely.

ETFs:
GLD Broke down below the 166.60 support and the consolidated all day. It still feels range bound.

SLV Sold off significantly with GLD in the morning but held its range much better. 31.00 is still the big area to hold.

XLF (Financials) Touched down on the 200 DMA at 15.05 area. The 200 DMA has been support in the past and the 15 level has also been pivotal so this is a logical place to rest. And today it had an inside day.

IBB (Biotechnology) stopped at the 200 DMA and well above its 3 day low. It's in a good spot to consolidate.

SMH (Semiconductors) Stuck in a wide multi-month range. Until clears the 50 DMA, or tests the lows near 29.60, stay away.

XRT (Retail) It's doing its best to hold on to the 200 DMA level. After and early morning break down it held up better than the major indexes. I'd like to see a close over the 3-pivot high at 60.65 before considering any long trades.

IYT (Transportation) 86.50 is where you can look for a range based reversal if a daily pattern suggests one. Not yet.

IYR (Real Estate) The second day of very big volume and touched support from June 2012. Maybe this is where it will consolidate. Wait.

USO (US Oil Fund) Now has 7 days inside the 11/7 range. Could break nicely either way, but phase is bearish. For shorts look at (SCO)

XLE (Energy) Acting just like the general market in how its breaking down below the 200 DMA. The 68 level should be good support.

TBT (Ultrashort Lehman 20+ Year Treasuries) The 58.80 area could be good support based on it being a significant low in May 2012.

Best wishes for your trading,

Geoff Bysshe

President

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