April 19, 2013
Mish's Daily
By Mish Schneider
At least there is always something exciting happening in the market, even on the slow drip, eroding phase days. I am talking about Vertex Pharmaceuticals, which rose 50% in the aftermarket based on a study revealing substantial improvements in lung function in people with Cystic Fibrosis. I mention this because that is the latest strategy for us based on current market condition-looking at individual instruments ready to rocket on their own engine fuel. We did not find that one ahead of time, but we did find First Solar last week! Anyway, with S&P 500 now in an unconfirmed warning phase, following the footsteps of the Russell 2000 and NASDAQ, the only index left fending off the big (thin) blue line (The color we use to depict the 50 DMA) is the Dow. And, with IBM down in the aftermarket, that could also be short-lived. Now that we are pretty clear that the top was put in place after a fun beginning to 2013, we can start to look at selling rallies and finding those pearls in the sand to buy.
S&P 500 (SPY) "Even the strongest fall if the pressure is too great." Yes indeed. Broke the 50 DMA and now in an unconfirmed warning phase. Very possible the 50 DMA will be defended so the week goes out with a level of enthusiasm. But also possible, it will continue its drop to fill a gap to 152.92 left on March 4th.
Russell 2000 (IWM) 88.79 the last swing low from February 26th.
Dow (DIA) The 50 DMA at 143.20 is next place to look at
NASDAQ 100 (QQQ) Poor AAPL! That crushed the NASDAQ to test the 200 DMA. AAPL reports next week. If the bad news is already in the pricing and the earnings come out a bit better than the worse expected or it drops a bit further after the news, it could very well be the time to look at a buy-especially against the 200 weekly moving average 372
ETFs:
GLD Classic white cap trade setting up. New lows, 3 tries to pop, then a failure with a new leg down. That's what I will be watching for.
XLF (Financials) Tested 17.77 by ticking down to 17.75 and then closing a bit better. But, now in a warning phase which means has to take back the 50 DMA at 18.00
IBB (Biotechnology)Because of VRTX, this ran in the after-market. But, 168 still the place to clear for some confirmation this can hold.
SMH (Semiconductors) Confirmed return to warning phase. Looking to see if can hold 33.50 now.
XRT (Retail) On the 50 DMA with today's low.
IYT (Transportation) 104.40 is recent support and if holds 105 level, could still be a buy.
IYR (Real Estate) FED says recovery fueled by housing sector. This better hold up over 70.50 or not very roseate. Inside day today-watch this one
USO (US Oil Fund) Glass bottom in play
OIH (Oil Services) Subscribers: A push through 40.40 puts it back over the 200 DMA
XLE (Energy) Bounce off the 200 DMA Subscribers: Bought against the 200 DMA and now want to see it clear 75.18 to keep going
TBT (Ultrashort Lehman 20+ Year Treasuries) Inside day and still holding the slingshot low
XOP (Oil and Gas Exploration) Unconfirmed phase change back to accumulation.
XHB (Homebuilders) Closed just under the key support, looking heavy
UUP (Dollar Bull) 22.60 is the weekly moving average
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