August 30, 2012
Mish's Daily
By Mish Schneider
All 4 indexes still don't agree. Just like Wednesday, the IWM pushed higher but the other 3 (SPY, DIA, and QQQ) were weak. It was also another day where you were better served to expect a reversal of any move beyond the 30 minute opening range, rather than a continuation.
Ben Bernanke speaks from Jackson Hole Friday at 10 AM and the market is wait anxiously to hear what he has to say. However, the last 3 day's have created a consolidation that is tight enough to move this market in either direction before Ben has a chance to say anything. Watch the range of the last 3 days. If it is broken and there is follow through from the Opening Range look for last week's range to be tested.
S&P 500 (SPY) Stopped right at 141 (well 141.12) again. That's still my number for turning more bearish, but the big number is Friday's lows. It just missed hitting the expect resistance at 142 so it and then 142.30 are still my numbers on the upside. 142.08 is the 3-day high.
Russell 2000 (IWM) Again, the best performer of the day, and it stopped at 81.86 resistance as anticipated (high of the day was 81.96. That is the 3 day high to watch. It has not traded below a prior day's low since the Friday low so today's low is the number on the downside, 81.14. The next support ara is 80.60-.80.
Dow (DIA) Still the weakest index. Again, it was unable to break the 20 DMA, and the 10 DMA is now bearing down on that 20 DMA. If markets get weak I'll look for short trades here. Until this gets above the 131.60 level I see it as a drag on the other 3 indexes. After that there is 130.80 as resistance as well. 130.60 is a very important low for support. If that breaks, Friday's low is next at 130.06. If the other markets are holding over Friday's low it may not break hard, but if all 4 markets are falling hard the DIA looks very weak. Next stop is the DMA at 129.
NASDAQ 100 (QQQ) Still the strongest index the key levels are defined by last week's range, but showed some weakness today. The key level in AAPL is 670. In the QQQ 68.15 has been good support for 3 days. If both the QQQ and AAPL are below these respective support levels, Friday's lows are next at 67.60. Then look for the 20 DMA at 67.35.
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