November 5, 2014
Mish's Daily
By Mish Schneider
Ambrose Bierce The Devil’s Dictionary
As the market tries a Republican Senate and Congress with a Democratic President on for size, some preliminary signs to reflect upon.
Oil-Regardless of the near-term future of oil and gas, I wrote extensively from the tech bubble about the huge volume possibly pointing to a blow off bottom. USO closed up over 2%. Of course now, we look to see if it has follow through.
Financials-As the indices and other sectors corrected, this held tough and continues to do so.
Solars-As much as the price of production has come down, there was no love in this group at all.
Healthcare-market anticipates no love here either for the time being.
As far as the indices, NASDAQ closed weak relative to the others but held the runaway gap (100.56 is the top and it has to hold at least a couple of cents above it to be a “gap”). S&P 500 made new highs, even closed on new highs yet did little to ignite after the 3 shooting stars pattern. Perhaps a sleeper.
The Dow, no surprise, is on new highs. And like going to a Doctor whose last name is Needle, the aptly named Small Caps held over 115.80. It needs a booster shot to clear 118.
Going into Thursday, I expect more upside-but within this extremely weird environment where it’s hard to find leadership, especially in the typical places-high momentum stocks.
Lack of leadership, bizarre action, some stocks down enough to evoke terror, other instruments living in the neutral zone, while others still, flip flop from day to day-sound familiar? Steadfast as Alice Through The Technical Looking Glass, make sure you know whose reflection you see looking back at you before you jump down the rabbit hole!
S&P 500 (SPY) I wouldn’t dismiss the shooting stars-they could just be taking their time to blast off
Russell 2000 (IWM) Consolidation-not necessarily a bad thing
Dow (DIA) If you all learn nothing else from me, here’s one to take to the grave-trust island bottoms
Nasdaq (QQQ) Considering how weak many stocks in this index looked, this held up impressively
XLF (Financials) More upside indeed
KRE (Regional Banks) 40.43 to clear now
SMH (Semiconductors) 52.68 the 2014 high in its midst now that it closed over 52.00
IBB (Biotechnology) I have theories on why this sank-considering it rose recently on Ebola concerns-but, I will keep those thoughts to myself-tech bubble-did write this looked tired way before
XRT (Retail) 88.00 a swing level of support
IYR (Real Estate) Closed unchanged at new highs
ITB (US Home Construction) We can at least say this is holding the 200 DMA
GLD (Gold Trust) Here’s a rabbit hold for you
USO (US Oil Fund) Confirmed a reversal candle after huge volume patterns. Now, at least one close over 30.50 would be good to see
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs 120 pivotal unless this begins to break further below 117.68
UUP (Dollar Bull) New highs again
IFN (India Fund Inc.) Looks like its got way more upside
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