June 6, 2011
Mish's Daily
By Mish Schneider
Today was the lowest closing price we've had in SPY since March 18. Although the volume was above average, it did not exceed the volume from Friday therefore no Distribution day. The slope of the 50 day moving average, which had remained positive until now, turned slightly negative and the adaptive moving average crossed beneath the 50 day moving average. We can now say that we are in a strong warning phase.
QQQ broke 56, significant support off the daily chart. The slope on the 50 day moving average is also now slightly negative with the adaptive moving average crossing beneath it. It also did not have a distribution day in volume.
IWM closed down 1.5% and actually filled the gap that was left from March 18. It is possible that if today's low holds and the price remains above the gap fill, we could see some buying come in. But, at this point, any rallies should be met with selling. There is significant resistance now up at Friday's hi.
DIA** was the best of the bunch. The slope of the moving average is neutral, the volume light and the corresponding gap from March 18 is still relatively far away. Tomorrow, it'll be this index that will most likely be the one to let us know if we can anticipate any kind of upward movement in the market.
ETF's: SMH** filled the gap that was left from April 19. There is good underlying support on the daily chart and with the neutral slope in the 50 day moving average, I would most likely turn to the semiconductors for a possible rally although would expect not much more than a mini swing trade at this point in time.
IYR** had an inside day today. It is now in an unconfirmed warning phase. This is one to consider going short with a conservative risk.
All of the ultrashort ETF's are beginning to look a bit overbought.
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