August 8, 2013
Mish's Daily
By Mish Schneider
My August Office Hours Are Now 10:45 a.m. – 11:15 a.m.
This sound like a nice summer agenda to me:
Wake up around 6 a.m., have a light breakfast.
Head out for a 4 hour bike ride.
Get back to check the market around 10:45 to buy stocks at 11:00.
Set stops and automated end of day exits and head out to the beach.
Don’t laugh. So far this month, you’re looking like a genius if you simply bought the SPY at 11:00 (New York time) and then sold it on the close. Regardless of whether the market has gapped up or down this has worked. If you want to be perfect then the rule is to do nothing if the market has actually rallied nicely from its open to the 11:00 hour.
Put another way, the market has been sold from the open to the 11:00 hour then ground its way higher for the rest of the day. On a good day it ends on the plus side, but no guarantees. Welcome to a choppy August. Plan accordingly.
I won’t count on the 11:00 low for the rest of the month, but I will expect intraday trends to completely reverse. This means we need to pick our entries carefully and take advantage of the chop, and be patient!
After moving lower for about three days the markets moved higher today. Given that pattern I’ll have a slightly bullish bias tomorrow, but the key levels of concern in all the indexes are the recent swing highs and yesterday’s lows. If you want to get more granular than that, then the bears should sell a 5-min OR breakdown and cover at 11:00, and the bulls should buy any 5 minute reversal near 11:00 and sell on the close.
S&P 500 (SPY) Minor levels to watch are 170.50 and 169.50.
Russell 2000 (IWM) Never recovered the Wednesdays high once it broke below it. Beware of weakness below 104.
Dow (DIA) Still below the 10 DMA. Needs to clear 155.40 to be considered anything other than heavy.
Nasdaq (QQQ) Looks like it wants to go higher. 76.60 could be a pivotal level to trade against.
ETFs:
XLF (Financials) Held the prior day low after selling off from the gap up this morning. Could not clear the 10 DMA.
SMH (Semiconductors) Could not hold the 10 DMA after gapping above this morning. Closed above the 50 DMA, bringing this into an unconfirmed bull phase.
XRT (Retail) Doji day and closed above the previously mentioned channel.
IYT (Transportation) Holding support around 115.75 but closed just shy of the 10 DMA.
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.
XHB (Homebuilders) Inside day.
GLDBig day today. Closed just under the 50 DMA.
USO (US Oil Fund)Gapped lower but held the 200 DMA.
OIH (Oil Services)Gapped up and held the 10 DMA. Recently over the 80 monthly.
XLE (Energy) Back over the 10 DMA.
XOP (Oil and Gas Exploration) Also back over the 10 DMA. Needs to clear 63.31.
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