June 10, 2014
Mish's Daily
By Mish Schneider
Not the first time we have seen a correction through time rather than price in the overall market. That scenario generally follows a low volume environment exactly as the one we have been in currently-active investors and HFTs main participants with little institutional and long term equity holders.
For us active folks, these scenarios lend themselves to A) choppy markets B) good riddance to weaker longs with tighter stops C) opportunities to find short positions as some hedge D) time to cherry pick instruments that are riding a volume wave and good technical pattern
No, that is not a multiple choice question, rather, correct answer: all of the above!
Personally, this is one of my favorite times in the market-nothing happening to fear a reversal of trend, time to think about what to buy during the correction that affords the best risk/reward and finally, cleaning up the model portfolio of trades that could keep one up at night because with the rally they did not go deep in the money, nor hit 1-2 profit targets along the way.
S&P 500 (SPY) Day 11 and counting of the breakaway gap. Volume super low
Russell 2000 (IWM) Inside day which proves my time correction point
Dow (DIA) Holding the Friday breakaway gap
Nasdaq (QQQ) Resting and holding with an inside day
XLF (Financials) Another healthy inside day setup
KRE (Regional Banks) Healthy inside day
SMH (Semiconductors) that inverted hammer candle meant nothing after all-readers: the lesson is always look for a second day confirmation
IBB (Biotechnology) Over 250 next stop around 270 I gather
XRT (Retail) When a former vulnerable instrument hits resistance and barely retreats-excellent sign!
IYR (Real Estate) Failed the fast moving average which most likely is a result of the firming rates
ITB (US Home Construction) Similar to XRT, performed well with an inside day
GLD Acted well in face of firmer rates-inflation fears?
XLE (Energy) Today was a good time to take some profits in this group
FCG (First Trust ISE Reserve NatGas) 22.30 support with another good looking chart if clears 2014 highs
TAN (Guggenheim Solar Energy) 6 days of compression and worth watching
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs and there she is-second time under the 50 DMA this year-has to confirm
PHO (Power Shares Water Resources) 27.23 2014 high
UUP (Dollar Bull) So ready to clear the 200 DMA now
EEM (Emerging Markets) Breakaway gap follow through yet again
IFN (India Fund Inc.) Parabolic mode
FXI (China Large Cap Fund) New high close for 2014
Every day you'll be prepared to trade with:
