October 9, 2011
Mish's Daily
By Mish Schneider
Distribution Day in Volume in 2 key indices SPY and QQQ. However, SPY held the 200 weekly moving average (IWM as well although closed the weakest) making it possible that that the market digested and tested support. After a decent US jobs report followed by a downgrade of Spain and Italy, the sell-off could have been far worse. However, China returns from a week off just when the US "celebrates" Columbus Day, a bank holiday. Chinese stocks and commodities prices continued declining. That will be an important component as we start the week. Earnings Season is also upon us.
SPY: 114.40 support, 116 pivotal, overhead resistance at the 50 DMA.
DIA: Marginally hanging onto the 80 monthly with Friday's close but failed to clear the 50 DMA.
QQQ: Confirmed the recovery phase so best hope for continued move higher. 56.20 next resistance, 53.60 support to hold.
IWM: Bearish engulfing pattern with good volume and hovering on the 200 weekly moving average. Either midcaps will spoil the fun, or QQQ and leading stocks like AMZN will pull them along for the ride up.
ETFs:
GLD 155 still the bottom of recent range, but unless it clears 161, 147 seems more likely.
SLV Beneath Friday's low, will be a compelling short looking for 20.00 considering the gap lower September 23rd, the recent trading within the island and price below all the work from May to Mid-September.
XLK (Technology) Like QQQ, confirmed recovery phase. Provided it holds 24.00 could see top of recent range 25.29 next.
SMH (Semiconductors) Also in recovery phase. As long as 28.00 holds, watch the technology sector to lead.
IBB (Biotechnology) Inside day Friday and another one in recovery phase. 94.00 magic number. The 200 DMA at 99.50.
XLE (Energy) Held the 80 month not the 200 weekly moving average. 60.00 now pivotal.
OIH Managed to hang in there closing above the adaptive moving average. Longer trend weaker than XLE since still far from the 80 monthly and 200 weekly MA. If market rolls over, this is where I would look to short, DUG ultrashort.
TLT ** (The 20 year Treasuries) An important component since now has had 4 down days after testing the 2008 high and failing on light volume. Held the adaptive moving average 116.50. Through 119.25, long term bullish trend returns.
XLF (Financial) Held 11.80. Another area to look at for short if market rolls over.
XRT (Retail) Sort of a wildcard given the double bottom from August lows yet the resistance at the 200 DMA.
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!
Every day you'll be prepared to trade with:
