July 18, 2011
Mish's Daily
By Mish Schneider
SPY retraced to 129.85 the area it broke out from back in late June. Must clear the 50 day moving average. On the weekly chart, the bullish trend remains intact.
QQQ came close to testing the 50 day moving average and closed with a DOJI day. Above the closing price at 57.54 on tomorrow's open, once it clears 57.88, still has to get above the 10 day moving average, but looks a lot more likely that it will get up to 60 as next overhead resistance.
IWM this began to rally in late June from 81.00 which it tested today. If it can clear 82.42 and today's high 82.63, could very well take another shot up at the all time high 86.82.
With solid earnings in many of the leading stocks tempered by sobering news in the financial sector and in Europe, this is still a buy the weakness, sell the strength market. However, with the long-term trend positive, it is much more difficult to stay short than it is to stay long. And once again, we are seeing a lot of divergence in the individual sectors and groups.
Featured ETFS:
SLV and GLD although GLD started making its parabolic moves in early July, SLV is now beginning to catch up. Still has to get through 40. But above that, looking for 40 to 45 area. We have been long GLD over the last three weeks and reentered a long position in SLV last Friday. As with all parabolic moves, rather than trying to pick a top, use trailing stops and chandelier exits.
EWC**held exactly where it needed to at the 200 day moving average. Also closed slightly above the 50 day moving average. The long term bullish trend is still intact. Above 32.00, especially on a closing basis, breaks a trendline on the daily chart. Could possibly be forming a head and shoulders bottom with the neckline above 32.90.
XRT** A close back above 54.73 puts it back in a strong condition. Then would expect a move to 56.
SMH closed just below the 50 weekly moving average now. Held support at 32.10 which goes back to December 2010. Now, if it can get back above the 50 weekly moving average, will return to a long term positive trend. Otherwise, if it fails these levels, we are looking at a possible move down to 27.50 the 200 weekly moving average.
OIH held up well. Still bullish with overhead resistance at 154 and then 156. Overall target 166. Would only change bias if it breaks and closes below 151.80 in which case we could see a move down to 150.45 as next support.
XLE if it can get back above 76.90, see if possible move up to 81.
XLF closed above 14.60 the recent support level after testing 14.40 (end of 2010 the weekly low was 14.36). Now, if it gets back above 14.80, this very oversold ETF could get a bounce up to test 50 weekly moving average at 15.50.
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