May 25, 2013
Mish's Daily
By Mish Schneider
After the big drop last week, Thursday and Friday’s action formed what could become a new base or launch pad as I like to say. Plus, the S&P 500 and the Dow had inside days as well. Basically, two possible scenarios will emerge into this week. First, the base remains just that-a base to gather momentum from as all indexes are firmly in bullish phases. Second, the base becomes resistance if the market gaps lower or works its way lower right out of the gate on Tuesday. The same applies with the groups and sectors we have been friendly to all year. Semiconductors, financials, real estate and interest rates-if they all stay firm and over last week’s lows, those are the best signs that the US once again shook off news of foreign woes, with minimal fear, sustaining its bullish sentiment.
S&P 500 (SPY) Inside day and just under the fast DMA.
Russell 2000 (IWM) AS with SPY and per the above analysis, the direction on Tuesday should define the direction of the next short term move up or down. This (as well as the others) closed beneath the weekly Bollinger bands
Dow (DIA) Inside day. This closed OVER the fast moving average. Sometimes, good things come in small packages.
NASDAQ 100 (QQQ) Similarly, has to either clear Thursday and Friday’s high to continue the bull journey or, if fails those levels, we’re looking at April highs next support.
ETFs:
GLD 2 inside days. 130.00 is huge as in if it fails see a move down to 110-115. However, never discount the power of the range break up over the 2 inside days either.
XLF (Financials) Inside day. Held the weekly Bollinger Band!
IBB (Biotechnology) Inside day and hung on to the 179 support level
SMH (Semiconductors) Inside day and held the gap from 5/3 which means as per the above comments, good one to follow the range break with.
XRT (Retail) 77.00 a really good support level to watch for a hold.
IYT (Transportation) Inside day. Last week, recommended a dip to 113 a buy opportunity. Friday’s low was 112.84 (note-not filling the gap from 5/7) and it bounced from there-now, that’s the area of support with 116 resistance.
IYR (Real Estate) The bigger they are-the harder they fall right to the 50 DMA. But, it held it so bullish in phase intact as we begin the week.
USO (US Oil Fund) Inside day and unconfirmed phase change bearish.
OIH (Oil Services) Inside day. It’s all about the monthly moving average now-43.83. Up or down.
XLE (Energy) 81.00 has been a big area of support
TBT (Ultrashort Lehman 20+ Year Treasuries) I see a base that formed as long as 64.00 holds
XOP (Oil and Gas Exploration) Inside day that fast moving averages
XHB (Homebuilders) Inside day.
UUP (Dollar Bull) 22.55 is a new buy opportunity
SGG (Sugar) Sugar futures back in a channel which means a move over 60.50 here should correspond with a new buy signal.
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