Support System $DIA $QQQ $IWM $SPY

---

It finally happened. On Friday we witnessed the long awaited test of the 50 day moving average. The S&P 500 dipped below the 50 DMA early in the afternoon, but was able to finish the day closing above it. The Dow Jones Industrial Average remains under the 50 DMA, confirming its warning phase. But, it is getting very oversold. With the other indexes holding support, I am expecting DIA to begin to climb back. It may still drop lower but, most likely not below 149.00. The Russell 2000s are holding support. Most interestingly, Nasdaq has an inside day. Watch how the range breaks here as an indicator of the next short term direction in the indexes. TBT closed on new 2013 highs. GLD climbed slightly higher and paused with a doji day. I am focusing on finding stocks that are holding support on moving averages.

S&P 500 (SPY) Dipped below the 50 DMA but closed above

Russell 2000 (IWM) Holding the gap up from 7/10. If 101.38 breaks, expect a yest of the 50 DMA.

Dow (DIA) Dropped lower and closed on support from the 7/1 high. Watch for this level to hold.

Nasdaq (QQQ) Inside day. Watch how the range breaks.

ETFs:

XLF (Financials) Confirmed its warning phase and had a doji day on Friday.

SMH (Semiconductors) Confirmed its warning phase but is holding support. Watch for 37.34 to hold.

XRT (Retail) Closed below the 50 DMA, bringing this into an unconfirmed warning phase.

IYT (Transportation) Closed over the 50 DMA. Now in an unconfirmed bull phase. Watch for the 50 DMA to hold.

IBB (Biotechnology) Holding the upward sloping 50 DMA and the gap from 7/11.

IYR (Real Estate) Broke the June lows and is now very oversold.

XHB (Homebuilders) Watch for the 200 DMA to hold.

GLDDoji day and digesting the move from Thursday.

USO (US Oil Fund)Grinding higher. 38.62 is resistance.

OIH (Oil Services)Inside day, under the downward sloping 10 DMA.

XLE (Energy) Gapped lower this morning but, holding the 50 DMA.

XOP (Oil and Gas Exploration) Inside day, holding the upward sloping 50 DMA. Oversold and has the potential for a big move up.

TBT (Ultrashort Lehman 20+ Year Treasuries) Closed at new yearly highs and is now at overbought levels.

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!