October 24, 2011
Mish's Daily
By Mish Schneider
A couple of caveats remain. First, is volume. Conflicting signals in that QQQ has had a good amount of accumulation days (had one today) as does SPY (did not have one today), but, the volume remains under the daily average since early October. Second, is the market internals with VIX overbought. Yes, price matters and the QQQs are so close to the all time high, an impressive fact indeed. Energy, (XLE) which fueled (pun intended) this most recent leg up, has had 7 days in a row above the floor pivots. XLK(Technology) caught up some, but has yet to clear the high on October 14th at 26.04. XLF (Financials) has 13.48, August high to deal with in overbought territory. I have liked XRT (Retail) for quite some time now, but some healthy digestion would really be comforting now that it's overbought on both the weekly and daily RSIs.
SPY 127.60, the 200 DMA next hurdle.123.50 (the area it cleared and followed through from) now big area of support to hold.
QQQ Actually not overbought which means the leading stocks are the best to watch now for next direction.
IWM August 31 high 73.89, the 160 EMA 74.12. Busted through 71.30 area, now key support.
ETFs:
XLK (Technology) Held 25.50 and like QQQ, not overbought. Watching this sector/group carefully
SMH (Semiconductors) 31.70 clears the 50 weekly and 200 daily moving averages. Tested and closed just shy of those points. Another one to watch.
IBB (Biotechnology) 99.30 the 200 DMA which it tested today. September high 99.54. Under 97.50 early warning sign.
IYT (Transportation) Took out August 31st high, but many hurdles remain, most obviously, the 200 DMA.
XLF (Financials) 13.48 high of last 2 months. 13.00 now key support
OIH* (Oil Service Holders). Good run today, but under the 70 EMA while many other groups/sectors traded above. If the market rolls, the longer term charts are still broken down.
KRE (Regional Banks) Even more overbought on weekly/Daily RSI.
TBT* (Ultrashort Treasury Bonds) Worked off some of the overbought condition today with an inside day. Highest close since right before the FED meeting September 19th.
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