February 16, 2012
Mish's Daily
By Mish Schneider
Wizard of Oz:
Scarecrow: Come along, Dorothy. You don't want any of *those* apples.
Apple Tree: Are you hinting my apples aren't what they ought to be?
Scarecrow: Oh, no. It's just that she doesn't like little green worms!
An old friend who owned AAPL stock since $100 called me and said I am getting out today once it traded $525 with a sell stop at $517. He is not a professional trader and has ignored many "TV" analysts calling for a top-including when Steve Jobs died and earnings have disappointed. So, why today? The 100% RSI on the weekly and daily charts brought to mind the adage about bulls, bears and pigs for one. Secondly, if anyone doubts the "psychological" and "collective consciousness" of the market, think herd mentality. It exists; it's real-you witnessed it today.
I cannot ignore technical signs like what happened in NASDAQ (QQQ). New highs, a sell off with a close on the lows, and a huge distribution day in volume (double the average daily). We shorted GOOG before the AAPL storm hit. Does it mean the market is over? That is unconfirmed as yet; but, we may see yet another rotation as money flows out of one area and into another.
ETFs:
XLF (Financials) Just about filled the gap and held Tuesday low. The longer it holds up in this range, the better the chances of a new leg up and over the 200 weekly moving average
XRT (Retail) New highs, lower close, distribution volume and threatening the 10 DMA at 57.25. Been in love with this group for awhile; now way tempered.
IBB (Biotechnology) Held the 10 DMA and closed ok. Also has positive pivots. A move down to 117 would not be the worst thing in the world, but certainly would cause havoc on its way there.
SMH (Semiconductors) Like the chances in this group better than the aforementioned for now since it is not overbought
IYT (Transportation) The 50-DMA coming up fast at 91.50.
Every day you'll be prepared to trade with:
