July 7, 2011
Mish's Daily
By Mish Schneider
Today, SPY had the Accumulation day in volume with a big gap higher closing up 1%. The buzz was that a lot of today's rally was in anticipation of a good unemployment number in the morning. Regardless, just looking at the technical picture, SPY continues to be overbought on a daily stochastic not on a weekly one and the volume/price patterns continue to make a strong case for higher levels.
QQQ closed up 1.4% with its six accumulation day in volume over the last two weeks. It took out the last swing high made on May 2 at 59.34 on an intraday basis, closing just below.
IWM also had its sixth day of accumulation in volume but has a bit to go to the high made on May 2 at 86.82.
Back in mid April, the daily charts had an inverted head and shoulders pattern. At that point, the Dow looked like it was going to 14,000. Unexpectedly, everything sold off, but with the recent test and hold of the 200 day moving average followed by this enormous rally, 14,000 is beginning to look more likely. Any correction at this point is a buy opportunity. Certainly, paying up for overextended stocks or ETF's means using tighter risks and shorter time frames for taking profits until we really do see a correction.
Featured ETFS:
SMH Closed above the 50 day moving average. What is a bit disconcerting, is the 50 day moving average's slope declined with today's rally. Of course that is just one of many factors. However, we do need a second close above the 50 day to confirm the phase to bullish.
SLV booked 1.5 in profit from entry leaving a small portion of the position using a trailing stop. The 50 DMA is still declining and acting as resistance.
GLD Confirmed in a bullish phase and still looking to fill 150.18-.56 the overhead gap. On the weekly chart, it is highly possible that we could see a move at least up to 154 and possibly beyond.
UUP Barely confirmed the recovery phase. Looking ahead on a weekly basis, if UUP manages to get above 22, we could see a significant strengthening of the dollar.
XLF rallied right to the 200 day moving average, closing just below. Above 15.50 on a weekly close, will clear the 50 weekly moving average. And a close above 15.70 will clear the 200 day moving average. However, a close below 15.50 and the bearish trend remains intact.
XRT and IYT both recommended longs from a while back, closed on new highs. IBB also recommended, got within two tics of its all time high at 110.02 on an intraday basis closing at 109.45.
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