July 31, 2011
Mish's Daily
By Mish Schneider
SPY Last time we tested the 200 DMA, the bounce was incredible but took a couple of false starts and then a couple of days of digestion. Important to note is that it never closed below the 200 DMA back in June. If we get 2 closes in a row beneath 128.64 that would put it in a Distribution Phase. SPY is oversold. At this point, would not be looking to short. 129.63 was the recent low until Friday. Will watch what happens in the next couple of days especially given the political environment.
QQQ Back in June, while SPY tested and held the 200 DMA, this broke below and then spent a week consolidating before it took off. Now, QQQ is much stronger. Above 58.60 is positive. The 50 DMA is underlying support.
IWM Broke but closed above the 200 DMA. Also oversold. Above R1 would be a good sign that the 200 DMA may remain intact. Otherwise, looking at the 50 weekly moving average.
ETFs:
XLE** 77.09 which was support, now resistance. A move above and could see this trade higher because the long term bullish trend still intact. Otherwise, will watch for a test of the 50 DMA.
OIH** Stronger than XLE. If it opens and holds above 157.33 risk to under Friday low. Still looking for a move to 166.
IYT Closed above the 200 DMA after testing it intraday. 91.18 the 50 weekly moving average and major support. Otherwise, over 94.44 new life.
SMH Broke the 50 weekly moving average at 32.50. Big area to watch for either a move above or now resistance.
FXI **Held key support. Now over 42.64, 43.40 next resistance.
XLF Over 15.00 back in business. Otherwise, 14.45 recent low and support
TLT Big move last Friday as rates dropped. Note Golden Cross in late June. Friday was strongest close since November 8, 2010. Also, dollar looks like it could drop further if Euro trades above 1.44
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