June 26, 2011
Mish's Daily
By Mish Schneider
SPY had an inside day closing near the lower end of the range yet holding the 200 day moving average. The volume was light, typical of a Friday. If it can hold Friday's low 126.62, the 200 day moving average at 126.52 and rally up to 129, that would be a great start. But it is also possible, that it will break and drop down to the March low of 125.28 with the 50 weekly moving average low at 123.70.
QQQ also had an inside day, failed the 200 day moving average once again, but is still holding its 50 weekly moving average. The weekly low in March was 53.77, prior week’s low 53.62 and last week's low 53.64 so we are well into support. It could cross back over 54.60 and rally or it could break beneath the 50 weekly moving average in which case looking at the next support down around 52.
IWM continues to hold up the best closing down .7%, holding the exponential moving average and the 10 day moving average which is sloping up. Therefore, above 80.05, would be a significant sign of strength. Otherwise, beneath 79, although it will still be well above the 200, at that point would anticipate it testing the 200 with recent low at 77.23. The other factor to throw into the mix is the slope of the overhead 50 day moving average which is still declining.
ETF's:
SMH looks almost identical to QQQ.
IBB** had an inside day. The slope on the 50 day remains positive. Therefore once again, this is my go to choice for strength.
XRT has an upward sloping 50 day moving average. Both IBB and XRT would not be the best short candidates even with market weakness.
IYR sold off last week with an upward sloping 50 day moving average. Should the market firm, this also could be a good candidate for a rally as it came really close to oversold on the near-term RSI.
XLE Now it is beginning to look oversold, but would not be surprised to see more downside at least to the 200 day moving average now at 69.50.
XLF continues to be range bound. 14.62 support and 15.20 resistance.
TLT using a tight stop after an entry at 97.22, got out on the close at 97.07 since it broke S1.
SLV we held our short position and continue to look for the target of 32.
GLD for the first time since February closed beneath the 50 day moving average but, the slope remains positive and it is oversold. At this point, it is in a weak warning phase.
Over the last couple weeks we've had both longs and shorts, some with huge profits such as BIIB, CMG on the long side and GS, SLV, CME, WLL, on the short side. Plus, we've had a bunch of short-term trades catching the volatility, using the reference points and our rules to time our way in, and exiting at the crest of the waves down and up. Most importantly, we bought the stronger sector and groups and sold the weaker ones. We had a couple of losses, but with controlled risks and discipline, they were minor. Going into next week, more of the same.
For more detailed analysis join me, along with hundreds of other subscribers, at Mish's Market Minute and get my daily trade picks, trade alerts, training videos, and exclusive analysis tools. Sign up for Mish's Market Minute now and get a free 2 week trial!
Every day you'll be prepared to trade with:
