July 24, 2011
Mish's Daily
By Mish Schneider
SPY Inside day after last Thursday coming within a few ticks of filling the gap that was left on the island top day July 7. That gap gets filled at 134.88. After strong volume on Thursday, Friday's volume was extremely light. As mentioned before, low volume corrections during bull trends are positive. Now, provided intraday support at 133.80 holds up, once it crosses 134.82, especially if volume comes in, 136 area next resistance.
QQQ Took out the recent high 59.36 made on July 7 and closed above that on a weekly basis. Some resistance at 60.35 area but overall target now 66.
IWM inside day Friday. Now, above 84.40, should see move to 87. 83.10 now key support.
With 2 of the 3 indexes putting in inside days with low volume, Monday could be an interesting day. Typically, following the way the trend breaks after an inside day is the advised strategy. However, I would be reluctant to short under Friday's low, rather wait out the possible correction for a buy opportunity. However, following the trend to the upside is recommended. Looking at the VIX, it is certainly nowhere near a state of irrational exuberance indicating rather a relative calm at these levels. With the August 2 deadline approaching concerning the debt ceiling decision, clearly the indicators are telling us that a deal is more likely than not. Imagine the havoc if that doesn't happen?
Featured ETFS:
GLD after two inside days, Friday had a narrow range, closing above the previous highs but not clearing the all-time high at 156.58. Provided Friday's low holds, a move above the recent all-time high, 165 next target.
SLV broke from the wedge and closed just above. Would continue to be a buyer of dips especially if it continues to hold above 38.80. Otherwise, wait to see what happens around 37.75, the fast moving average. Recent high 39.69, all-time high 48.35.
EWC Inside day. Sill have target at 33.20.
XRT nearly an inside day, taking out Thursday's low by one tick. Now, 54.45 is critical support as that is the low of the last couple of days and the fast moving average. Under that level we could see a dip down to 53.70 area. Above 55.45 next resistance at the all-time high 56.
IBB acted well but could not clear 109.47. Once it does looking for a move up to 113. In the meanwhile, buy dips.
SMH traded above the 200 day moving average but could not quite fill the gap up to 34.03 with Friday's hi 33.93. The 50 day moving average comes in at 34.08. Once it fills the gap and gets through the 50 day, especially on a closing basis, next resistance up to 35.36. Now, the 200 day moving average at 33.44 is key support.
IYR the high on July 7 was 63 and last Friday it came real close with a high of 62.95. Once this clears the all-time high, projected move up to 68. Another one to be a buyer of dips.
IYT a bit worrisome in that it is lagging behind the other leading sectors and groups. Had an inside day on Friday and held the fast moving average at 97.03. A move beneath the fast moving average and the declining 50 day moving average is just below at 96.58. If that breaks could mean trouble for transportation stocks. Above Friday's hi and R1 at 98.22 would be a good sign of strength.
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:
