The Monday Pattern Continues

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Today's Mish's Daily was prepared by Geoff Bysshe, co-founder of MarketGauge.

Yesterday I ended my lengthy commentary with, "Monday's have been weak in recent weeks so don't be surprised to see weakness and even a down day."

With the exception of the QQQ all three market watch indexes spent all day in the red. This is good because it is the routine of the market right now. Let's not wish for anything more than a rally that "gets no respect" as the WSJ had on the front page today.

August trading is going to be slow. We did a good job today in the room of picking up the Q's at the lows and selling then at the highs because when the weakness comes in the morning you don't have to be patient (traders generally don't like to wait), and when weakness is expected you don't get caught off guard.

Sorry I can't promise the same nice pattern tomorrow, Tuesday.

We do have a mildly negative pivot pattern in all but the Q's so if they are breaking down below their pivots let them get weak. I'll fade weakness as long as our buying on dips conditions are in place.

If you're waiting for me to comment on volume, I won't, I was horribly low as we should expect. I only care if it's big in seasonally low volume periods like now.

S&P 500 (SPY) I don't want to over analyze this. 141 is the big support level. I'll feel better as a bull if we test this sooner rather than later. Until then use the OR and pivots as your guide to interim lows to trade off of for day trades.

Russell 2000 (IWM) Friday's low only broke by a penny (that was the key our getting long the Q's) and that leaves it with essentially an inside day at the July highs. If it breaks the 81.86 high it may be worth following up.

Dow (DIA) 133.14 is the 2012 high. Another narrow range day inside the Thursday range. I'll repeat what I said yesterday... Key support areas are 132.00 and 131.30.

NASDAQ 100 (QQQ) 68.55 is still the intraday 2012 high, but it did manage to close up by 8 cents, which leaves me feeling as I felt yesterday... A reversal after taking out this high would have traders looking to sell the "top". I look at a 3-period RSI, and with the last 2 days closing with an RSI reading at or over 99. I don't expect much upside here Monday.

ETFs:

GLD Saw a big volume OR breakout and closed over the trend line based on closes from the 7/27 high. Still.... Will this have what it takes to get through 158?

SLV (Silver) Blasted through the 27.50 level I mentioned yesterday. I'm looking to buy weakness over 27.50 now.

XLF (Financials) A quiet continuation of its breakout.

IBB (Biotechnology) Nothing remarkable going on here but you'll see some interesting biotech and pharma stocks on the list today keep an eye on the long side here. If the market gets weak, we'll look to see if this group finds buyers.

SMH (Semiconductors) It held the 33.30 level mentioned yesterday to the penny. Needs to stay above 33.30 or next stop may be 32.55. That said, the upside looks great if it can clear 34.00.

XRT (Retail) Should hold today's low at 60.79.

IYT (Transportation) Confirmed phase change to bullish. Now, can buy dips more safely. The 94 area is resistance and the trend line from the 2012 highs. Look for support around 92.

IYR (Real Estate) The key range is 65.20 to 64.15.

USO (US Oil Fund) Getting closer to target of 36.50 level. A dip down to the 35 would be worth considering.

OIH (Oil Services) I still think 41.20 is the key level to use as the bull/bear bias level

XLE (Energy) Big resistance at 72.77 - 73.00. Draw the resistance line from the July 2011 highs.

TBT (Ultrashort Lehman 20+ Year Treasuries) TLT's are sitting on their 200 DMA. Expect TBT to consolidate.

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