August 8, 2013
Mish's Daily
By Mish Schneider
The market action today offered something for everyone. The bears got a 3rd down day in the SPY, and the bulls got rewarded for buying the pullback in the Q’s to the 10 DMA.
In a very healthy bull move, a 3 day retreat to support would be enough for the bulls to resume the upward momentum with a nice big up move very soon. The long term trend is still bullish, but in recent weeks the markets have demonstrated that the bulls’ momentum is slowing down. If the bulls rush in, I would join in cautiously, but I’ll be very selective. The next big buying opportunity will come when the market has had more time to flush out the weak longs. Three down days into support has not done that.
All the markets are sitting in good support, which may slow a decline, but I would not count on it to prevent further declines. Therefore, I’ll remain cautious on weakness. I don’t think it’s time to pick the bottom in this correction (if I can call it that).
S&P 500 (SPY) Key level for bulls is today’s high which lines up with the 10 DMA. If it breaks lower look for support at 167.50
Russell 2000 (IWM) Very heavy today. Key level to break before looking to the long side it today’s high. Important support at 103.
Dow (DIA) Key level to watch for resistance in a rally is 156.25. In a decline look for support at 153.67.
Nasdaq (QQQ) Thishas been the leader and still looks the best if you are looking for a long. 76.25 could prove to be interesting support if it lines up with an OR low. Watch 77.00 for resistance.
Tonight’s Daily was prepared by Geoff Bysshe, President and Matthew Mullins, Assistant Director of Trading Education and Research of Marketgauge. Mish is on vacation until September 1st.
ETFs:
XLF (Financials) Support at 5/22 high at 20.35.
SMH (Semiconductors) Holding the support at 38.20. However, it closed under the 50 DMA bringing this into an unconfirmed warning phase.
XRT (Retail) Back into the previously mentioned channel. Under the 10 DMA.
IYT (Transportation) Under the 10 DMA and outside of the candle from 8/1.
IBB (Biotechnology) Holding moderate support level around 195.00.
IYR (Real Estate) Bear phase now after last week’s death cross. Continuing its downward slide. Very oversold now.
XHB (Homebuilders) Confirmed it’s warning phase.
GLD123.55 is offering some support. Sideways trading today.
USO (US Oil Fund)The topping candle from 7/19 remains intact. Could not clear the 10 DMA.
OIH (Oil Services)Tested and held support at 44.70 area.
XOP (Oil and Gas Exploration) Broke the 10 DMA. Needs to clear 63.31.
TBT (Ultrashort Lehman 20+ Year Treasuries) Gapped lower and closed under the 10 DMA.
UUP (Dollar Bull) Lowest level since June. Holding the June lows.
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