October 15, 2013
Mish's Daily
By Mish Schneider
Quote: Benjamin Disraeli
With all the noise, the Dow both closed with inside days-Tuesday’s range inside of Monday’s range, which coming from a logical place, after a dramatic price rise over the span of 3 trading days, makes a case for digestion. The small caps or Russell 2000s almost had an inside day, breaking Monday’s low by one tick. If it were only that easy, the heavy duty longs would sleep well tonight. But, it’s really not that easy. NASDAQ made a new 2013 high and closed on the intraday low-always a reason to hold one’s breath-waiting for confirmation as topping action or not. S&P 500 hasn’t done much to squelch its possible topping candle from September 19th. Not saying the bears should get all snuggled up, since this is where the market gets real interesting. News! Like it or not, headline sensitive price action supported by literally 2 possible technical scenarios-top or digestion for more upside, is making us all a little nuts. Even with our Premium portfolio’s closed positions up 32% since June (see the site for details), we are currently trading less often with smaller position sizing and tighter risks.
S&P 500 (SPY) After a fairly significant distribution volume day, if 168 breaks, the writing will appear to be on the wall. Otherwise, long and short term trend intact.
Russell 2000 (IWM) Nearly an inside day could be like almost surviving an operation. However, unless there is another down day tomorrow after Monday’s new highs, this is still ok.
Dow (DIA) True inside day but also true return to an unconfirmed warning phase.
Nasdaq (QQQ) Possible reversal candle from new highs, especially if this opens lower and cannot recover
XLF (Financials) All about 20.00
SMH (Semiconductors) Possible reversal candle from new highs, especially if this opens lower and cannot recover
XRT (Retail) Inside day but a move under the 50 DMA, not pretty
IYT (Transportation) Most hopeful looking right here
IBB (Biotechnology) Unconfirmed warning phase.
IYR (Real Estate) Like to see 65.40 clear or back to 64.00 area
XHB (Homebuilders) As easily as this crossed 3 moving averages to the upside, is as easy as it failed all three again on Tuesday.
GLD Investors could easily run here against the recent lows thinking it safer.
OIH (Oil Services)A true inside day after makingnew 2013 highs
XOP (Oil and Gas Exploration) Still good looking although wouldn’t want to be a fresh buyer at these levels
TBT (Ultrashort Lehman 20+ Year Treasuries) TLT now a confirmed warning phase.
FXI (China) Inside day
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