July 20, 2011
Mish's Daily
By Mish Schneider
SPY clearly in a situation where it could correct further back to 131.30 or work sideways and then resume the move up. Today's volume was extremely light which always makes corrections suspect. But, we still have a negative sloping 50 day moving average which keeps the bullish phase relatively weak for the time being, yet we held the fast moving average now at 132.36.
QQQ This also had extremely light volume and unlike SPY has a neutral slope on the 50 day moving average. Tomorrow the pivots are positive. Therefore, provided it holds above 58.10, through the FTP at 58.76 would expect the rally to resume. Otherwise, at this point, a failure of the adaptive moving average and the 10 day moving average would not be encouraging.
IWM did not get through the 10 day moving average, which was a significant clue. However, with the 50 day moving average neutralizing in slope and the positive pivots tomorrow, once this clears 83.50, should see follow-through to the upside. After that, could very well take another shot up at the all time high 86.82.
The debt ceiling goes unresolved and the recent round of earnings came in mixed. I still see the dips as buy opportunities. However, I suggest only buying strong stocks or ETF's that have clear risks against moving averages.
Featured ETFS:
GLD had an inside day. Now, using the rules for an inside day, considering how strong chart is, follow it above today's high.
SLV Now, above 39.75 should continue to move up with the initial target of 44 to 45 still applicable.
EWC* holding 32, but now would like to see a close above 32.27 to get to its next target at 33.20.
XRT held the support at 54.32, but now with negative pivots, could see a move back down to the 50 day moving average. Above 54.75 and today's high 55.08, next stop 56.
IBB did not perform as well as some of the other sectors yesterday and today after a strong open, sold off and tested the positive sloping 50 day moving average. A move back above 107.30 provided it holds today's low, will look positive.
SMH still holding the 50 weekly moving average yet ran right up to 200 daily moving average once again and backed off. Since this hasn't violated its long-term bullish trend, provided it now holds above 32.35, if it clears the 200 day moving average expect a rally up to 34.
OIH overall target 166. Would continue to be a buyer of dips.
XLE now see a possible move up to 81.
XLF reversed the recent down trend and provided it continues to hold 14.60, could see a rally up to 15.25. The 50 weekly moving average is at 15.50.
For more detailed analysis join me, along with hundreds of other subscribers, at Mish's Market Minute and get my daily trade picks, trade alerts, training videos, and exclusive analysis tools. Sign up for Mish's Market Minute now and get a free 2 week trial!
Every day you'll be prepared to trade with:
