September 13, 2013
Mish's Daily
By Mish Schneider
I really do not want to see what I have been writing about all week come to fruition. The Dow as the laggard catching up with its move over the 50 DMA (confirming a bullish phase) as the other indices with overbought conditions and none except NASDAQ clearing the old 2013 highs, as the last gasp of this recent run up. I gasp just writing that long winded sentence! Certainly, we continue to look friendlier than not considering the velocity of the bullish phases (upward slopes on key moving averages) and that SPY and QQQ really just finished unchanged when all is said and done. What, though, should one do if this is indeed more than a digestion/time compression rest after the stellar week? For one, tighten stops on any existing longs. Secondly, make cash your main position as the shorts, especially on stocks that have been beaten to a pulp all year, come with risk unless you are an experienced short seller. Third, don’t try to pick a bottom if Friday the 13th brings out the devil. Let the market tell you how far and wide this correction can go, especially with FED speak coming up, and Syria far from resolved. Remember, this rally did not reverse the topping candles from early August in the small caps (Russell 2000). So, pick up your favorite black cat, break some glass and walk under every ladder you see. Then, use common sense and not common superstitions to guide your decisions!
S&P 500 (SPY) 168.26, Tuesday’s gap low is important to hold.
Russell 2000 (IWM) 104.20 good support level to see hold. Otherwise, looking at 103.
Dow (DIA) Confirmed phase change to bullish. Giving it some room, 151.77 is the key support to hold
Nasdaq (QQQ) Over 78.26 negated the possible topping action and Thursday’s high is 78.25. Doji candle to boot so really, anything can happen and the case for bullish remains intact.
ETFs:
XLF (Financials) Unconfirmed phase change to warning as it crossed back under the 50 DMA. Tomorrow should be key
SMH (Semiconductors) As long as this holds 39.18, the gap from Tuesday stays in place and today’s action looks more like a rest
IYT (Transportation) Today’s action looks more disconcerting than just a correction as the 2013 highs eluded this group. 116.50 needs to hold
IBB (Biotechnology) Resting still
IYR (Real Estate) Still see bottoming formation, especially if it can get back above 64.37
XHB (Homebuilders) Inverted hammer and doji candle-that’s special.
GLDNasty day in its primary trend-hates peace and taper talk it seems
USO (US Oil Fund)If 38.84 area holds, very possible this can be getting ready for more upside.
OIH (Oil Services)46.75 really should hold here
XLE (Energy) Marginally stayed above 84.00
XOP (Oil and Gas Exploration) Wouldn’t chase now, but give it some time to see what it does from here
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:
