August 19, 2013
Mish's Daily
By Mish Schneider
Testing and failing is an apt way to describe today’s action. The morning began with the S & P 500 and Russell 2000 tenuously holding the 50 Day Moving Average. The indexes held during the initial test of the 50 DMA, but failed during the second test. The day continued like this; testing support levels and then failing them. Nasdaq broke out of its inside day, but then slid downward with the rest of the indexes and closed the day under the range of the inside day. The Dow Jones Industrial Average also continued its downward slide, and is now oversold. TBTs continued to climb and made yet another yearly high. TBT has not been at these levels since March, 2012. A correction like this can be healthy for the market and create many opportunities, if you know where to look. I am focusing on stocks that have corrected and are holding support on moving averages.
S&P 500 (SPY) Closed under the 50 DMA, bringing this into an unconfirmed warning phase.
Russell 2000 (IWM) Closed the gap from 7/10 and closed the day under the 50 DMA, bringing this into an unconfirmed warning phase.
Dow (DIA) Closed on moderate support. 149.20 is the gap low from 5/3. Watch for that level to hold.
Nasdaq (QQQ) This is the best performing index. Watch for recent lows to hold.
ETFs:
XLF (Financials) Nasty drop and filled the gap from 7/5. Oversold and holding the 80 monthly moving average.
SMH (Semiconductors) Watch for 37.34 to hold.
XRT (Retail) Closed below the 50 DMA, bringing this into a confirmed warning phase. Closed on support. Watch for today’s low to hold.
IYT (Transportation) Closed under the 50 DMA. Now in an unconfirmed warning phase. Watch for the 50 DMA to clear and today’s low 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. May test the 200 weekly, at 58.36.
XHB (Homebuilders) Closed under the 200 DMA, bringing this into an unconfirmed Distribution Phase.
GLDInside day. Watch for today’s high to clear and the low to hold.
USO (US Oil Fund)Inside day. Watch for today’s high to clear and the low to hold. 38.62 is resistance.
OIH (Oil Services)Corrected to and is holding the 50 DMA.
XLE (Energy) Closed under the 50 DMA, bringing this into an unconfirmed warning phase.
XOP (Oil and Gas Exploration) Closed under the 50 DMA, bringing this into an unconfirmed warning phase. Very oversold.
TBT (Ultrashort Lehman 20+ Year Treasuries) Closed at new yearly highs and is now at overbought levels. At the highest level since March, 2012.
UUP (Dollar Bull) inside day. Watch for 21.86 to hold.
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