More Weak Data Puts The Market To Sleep

April 30, 2012

Mish's Daily

By Mish Schneider


More Weak Data Puts The Market To Sleep

Today the market received more weak economic data here at home with lower than expected personal spending and Chicago PMI data. This combined with Spain's economy officially in recession put the market to sleep after a brief slide in the morning.

After the first half hour the market drifted sideways creating some much need consolidation. The first day of the month is often a more volatile day so Tuesday should be more interesting.

S&P 500 (SPY) The key levels mentioned for Friday are still in place - support around 139.40, and resistance around 141.30. If we break 139.40 look for support at around 138.70 where you'll find the 10 , 20 and 50 DMAs.

Russell 2000 (IWM) On a daily basis it remains the weakest so we'll continue to watch it closely. Take note of the important daily gap from 4/4 it entered on Friday.  Note the 81.87 given as the support number for Monday turned out to be the resistance area after the market traded below it early in the session. Expect 81.90 to be significant on Tuesday also.
The close back below the 50 DMA and the trend line from the highs and the negative pivot pattern may all add up to a short opportunity here tomorrow.
Dow (DIA) Two high doji days on very light volume. I don't want to over think it. Let the market speak to use tomorrow.
NASDAQ 100 (QQQ) Consolidated at the prior day's low. If it breaks the low the next two levels of support are 66.50 and 66.00 areas.
Gold Trust (GLD) Opened lower than the Friday low and rallied all day to close at the high of the day and near Friday's high. It was the healthiest action I've seen in weeks in GLD. It may be ready to break out of its daily base.
XLF (Financials) Mirrored the action of the SPY's so nothing particularly noteworthy here today.
IBB (Biotechnology) The majority of the market indexes gapped slightly lower today but the IBB gapped higher.
However, it immediately followed the market lower. The end result is a pattern we look out for to identify topping action. Volume was light but the location is right for at least a short term top so I'll pass on any long trade opportunities here for a few days.
SMH (Semiconductors) An inside day and returning to a warning phase. In a weak market this has short potential.
XRT (Retail) Yesterday I said it needed a rest, but a gap higher followed by a close near the low of the day and well into the prior days range is more negative that I'd like to see to stay bullish. It's sitting right on top of key support the 60.65 level.
IYT (Transportation) I'm just as tired of writing this as you probably are tired of hearing it... Still sitting in the wedge on the daily chart from the lows in Feb. and the highs in March.
IYR (Real Estate) Doji inside day. 63.50 is now a very pivotal number.
OIH (Oil Services) This laggard outperformed today. If it moves higher tomorrow, it could be worth following.
XLE (Energy) Stopped right at the support level I gave you yesterday, 70.50, closed on the highs after and OR breakout. It has a good target of the 50 DMA at 72.40. If energy moves, this is even stronger than OIH.
TBT (Ultrashort Lehman 20+ Year Treasuries) Sitting on major support, but weak economic data and European sovereign debt worries are going to have to abate for this to move higher.

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