"What Was Scattered Gathers, What Was Gathered Blows Away"

May 15, 2014

Mish's Daily

By Mish Schneider

Heraclitus

I for one, am thankful for Thursday’s action, other than having to endure tweets by all the “smart” analysts who “knew” this was coming, even though most were merely “talking” the divergence train and not so clear about what it meant.

Of course, the doomsday folks had their day while the bulls (not sure there have been too many) had indigestion after Monday’s rally to new highs.

As for us here at Marketgauge, we fared well. Not short and yet, with all of our longs holding up, I particularly have no less than 7 fantastic trades in mind with now, a much lower risk.

These flushes typically yield opportunities. The only egg, (I’m vegan so let’s call it tofu), on my face to date relates to the interest rates. I don’t want to say I will be right about the bottom someday (after all, so is a broken clock right twice a day), but, I will be all over it the day the trend turns.

And trust me it will. Cycles-moon’s got ‘em, so does the market.

S&P 500 (SPY) Held the 50 DMA so that’s something for the analysts to muse over

Russell 2000 (IWM) Nice turnaround from lows, but not enough unless it closes the week over the 200 DMA

Dow (DIA) Held the 50 DMA but if it breaks it end of week, then it will appear next move is more correction

Nasdaq (QQQ) Could still come back to life-really it could over today’s highs

XLF (Financials) 21.50 back in focus

SMH (Semiconductors) I’ll play over todays highs

IYT (Transportation) Orderly candle, good place to look if market firms

IBB (Biotechnology) Holding the 200 DMA at least

XRT (Retail) Ugly but into support

IYR (Real Estate) still looking okay into housing starts

ITB (US Home Construction) Interesting reversal candle-does somebody know something?