"Small caps still stuck"

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Geoff Bysshe

As IWM stayed stuck under its 200 DMA, the QQQ, SPY and DIA all drifted higher in steady and uneventful trading.

The SPY closed right on its 50 DMA and at the same level of the high of the gap down day of 7/31. This is a very important inflection point that will almost certainly be important in tomorrow trading.

The key levels to watch for tomorrow are the today’s low in the SPY and the IWM since a reversal of today’s action to below those levels would have the bears feeling like the markets just rejected attempts to trade above their 50 and 200 DMA’s respectively.

The bulls seem to be in control but based on the extremely light volume there aren’t very many around. So I’ll follow their lead until key daily support is broken.

S&P 500 (SPY) The key level is today’s low 195.76. Above that the momentum is intact, but there’s plenty of resistance above so I’d be careful about paying up. 196.16 fills an important gap.

Russell 2000 (IWM) Still stuck under its 200 DMA and if it breaks it by trading over today’s high the next big level to clear is 144.30. Watch for weakness if today’s low is broken in earnest.

Dow (DIA) Still got a little ways to go to get back to its 50 DMA which is now obviously sloped down.

Nasdaq (QQQ) Even with CSCO getting hammered today the QQQ led the market higher. 97.30-97.50 is the zone of resistance at the highs, and not very far away.

XLF (Financials) Kept up with the market today, but now its right at its 50 DMA or 22.71 and heavy resistance from prior price action.

KRE (Regional Banks) Notably weak today closing on its lows for the day and in a pattern that could be a bear flag. This could be a short in the making

SMH (Semiconductors) A confirmed phase change to bullish, but the real resistance comes in at 49.85-50.00.

IYT (Transportation) Nice big volume strong day and close over the 50 to put it back in an unconfirmed bull phase.

IBB (Biotechnology) Nice follow through to confirm its bull phase and breaking out of a significant daily range high level of 260.60.

XRT (Retail) Stuck between the 50 and 200 DMA but looks like it wants to break higher.

IYR (Real Estate) Matched its 2014 highs and closed with a doji.

ITB (US Home Construction) Very strong day with a pick up in volume, but still in a solid bear phase.

GLD Second inside day in a row bullish phase and sitting on its key long and very long term support levels.

Metals and Mining (XME) Inside day, compressing. Could be one to watch.

USO (US Oil Fund) Broke down hard. 35 could be support, but below that there is plenty of room to fall

XOP (Oil and Gas Exploration) Another weak day, watching to see how it reacts to its nearby 200 DMA.

TBT (Ultrashort Lehman 20+ Year Treasuries) TLT-Closed on new highs after strong demand at the 30-yr bond auction today.

UUP (Dollar Bull) consolidating in a bullish way.

EEM (Emerging Markets) Inside day.