October 8, 2014
Mish's Daily
By Mish Schneider
It Ain’t Hard To Tell (Stink Mix) Written by Nas Produced by Dave Scratch
Ms. 200 points is the new 100 points move in the market sure did not disappoint!
Sound familiar? It should. It’s what I wrote the other night after the 270 point drop-applies yet again on the 270 point gain.
You know the maxim about full moons and women’s cycles? It seems to me that Tuesday, Madam Market had a bad case of PMS ahead of the Blood Moon. And Wednesday-well, she took Motrin!
And that brings me to Janet Yellen-clearly the FOMC minutes came out in the nick of time, ya think?
However, before we go nuts buying again, a couple of reminders about confirmation and volume. We need a second day to confirm the plethora of reversal patterns (starting with IWM) and phase changes (QQQs and DIA). Volume: we saw robust volume but was it an accumulation day? (When the volume exceeds the day before’s volume and the close is green).
SPY yes. QQQs yes. DIA marginal. IWM yes. With that question resolved, we do need to see a second day confirm then. And, we also need to consider risk/reward. Swing trading has had its challenges unless you have a strong stomach and a large threshold-remember the Icahn, Buffet and Soros comment?
Most of us though, who look for trending markets are happy we have not been whipsawed through the volatility. True, the markets have rallied after every midterm election for the last 50 years.
Also true that this year has proven to be the year contrary to popular beliefs. I would watch IWM to see if it can clear 110, SPY if can clear the 50 DMA. Conversely, if DIA and QQQs hold the 50 DMA. Best clues for next 200 point up or down move! And if traders are a bit weary leaving Thursday’s market “not in the mood”-notch it up to that time of month.
“I dominate break loops, giving mics men-e-strual cycles
Street’s disciple, I rock beats that’s mega trifle
And groovy but smoother than moves by Villanova
You’re still a soldier: I’m like Sly Stone in Cobra” From It Ain’t Hard to Tell by Nas
S&P 500 (SPY) 192.35 last week’s low held like nobody’s business. Now back looking at 197.50 the 50 DMA
Russell 2000 (IWM) From Tuesday: “106.94-107.27 are recent lows (going back to February) Therefore, a close above and we might see some relief.” Darn was that ever true! Now, there’s 110 boom or bust
Dow (DIA) 169.10 is the 50 DMA to hold give or take a few ticks either direction. If it does, then Wednesday’s session goes into the history books.
Nasdaq (QQQ) 97.95 area key to hold with a move over 98.75 worth a follow
XLF (Financials) Held last week’s low and back in an unconfirmed bullish phase if holds 23.10
SMH (Semiconductors) Last night: “If holds and clears 49.50-a stretch, but anything is always possible.” LOL. Ok, now if holds 49.50 has to clear the 50 DMA at 50.60
IBB (Biotechnology) “Closed just beneath the 50 DMA. If there is a place to go long, even for a shorter time frame on a firming of the market, it’s here” Whoa, truer words never said-now has to hold the 50 DMA
XRT (Retail) Went up screaming and kicking-so now, has to settle down over the 200 DMA to be impressive
IYR (Real Estate) “This gets through 70.00 we can talk.” Let’s talk-has to hold it now
ITB (US Home Construction) Maybe double bottom-like to see even more evidence still
GLD Nutty day but ended up how I expected-firm and close to 118 resistance
Metals and Mining (XME) Gorgeous reversal candle if holds and confirms-GDX too
USO (US Oil Fund) The kind of pattern that could turn into an island bottom-could
FCG (First Trust ISE Reserve NatGas) Love this against 15.20 2012 and 2103 lows with the reversal candle if confirms
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs looked shaky til FOMC came out to play
UUP (Dollar Bull) 22.65 is the low of the most recent runaway gap
EEM (Emerging Markets) Boost here over the 200 DMA
FXI (China Large Cap Fund) Did what it needed to do. Now, 40.35 is the overhead 50 DMA
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