Smelling Salts For The Market
For the last few days the markets have just been waiting for tomorrow’s employment data. I think?
While this will probably be the biggest data day of the month, I’m not entirely sure it will resolve the markets’ schizophrenic stupor. The markets (DIA, SPY, QQQ, and IWM) have been highly uncorrelated intra-day for the last week or so, and this is a sign that there isn’t a lot of conviction in either the bullish or bearish camps.
By ‘uncorrelated intra-day’ action I’m referring to the fact that on many more occasions than is normal, this week one index would be at its low of the day while the others were at their high of the day. This condition does not lead to a trending market.
The result of this indecision has been that the DIA and SPY sit only a fraction of percentage point from where they were 2 weeks ago, and have not moved up or down much since. While the IWM’s range is a little wider, it sits only a fraction of a percentage point from where it closed October!
Given the historic size of the 6-week rally we experienced in the SPY and DIA and QQQ, from the mid October lows, I guess it should be expected that the market would still be a little dizzy and disorientated.
Let’s see if tomorrow’s data serves as smelling salts for either the bulls or the bears.
S&P 500 (SPY) Doji day near the highs. Still consolidating.
Russell 2000 (IWM) Inside day on the 10 DMA. Held support at 116.22
Dow (DIA) Doji day, held at the 10 DMA during the early morning sell off.
Nasdaq (QQQ) Started the day the strongest, then proceeded to chop for the rest of the time. Still need to clear 106 to show real strength
XLF (Financials) Continued the climb after yesterday’s break out of the recent consolidation for a new high close.
KRE (Regional Banks) Inside day under the 10 DMA
SMH (Semiconductors) A hammer doji at the highs. Still extended, may need a rest.
IYT (Transportation) Held the 10 DMA but looking a little heavy at the moment, and 165 is a big level of resistance.
IBB (Biotechnology) Took a day to rest, which really helped the daily RSI. Still extended on a weekly and monthly level though.
XRT (Retail) Holding recent support at 92.00 and just consolidating
IYR (Real Estate) New 2014 high, but still in consolidation
ITB (US Home Construction) IF this breaks support at 25.00 it is in trouble
GLD (Gold Trust) Held the 50 DMA with an inside day, confirms an accumulation phase, but let’s see it trade higher before we trust it.
GDX (Gold Miners) Inside day, still failed to clear the 50 DMA at 19.90
USO (US Oil Fund) New 2014 low, gas under $2.00 a gallon in some places for the first time in years.
OIH (Oil Services) Consolidating at the lows
XLE (Energy) Not quite ready to make its move.
XOP (Oil and Gas Exploration) New 2014 low close
UNG (US NatGas Fund) New 2014 low close after a nasty sell off
TAN (Guggenheim Solar Energy) Inside day
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs Closed the gap down from 12/1 with a very strong day
UUP (Dollar Bull) Gapped lower today leaving a baby island top
IFN (India Fund Inc.) Another new 2014 high close but getting very extended
