October 30, 2013
Mish's Daily
By Mish Schneider
So there was the disconnect! We came in light; the market was on new highs and rich; the Fed said nothing new; the market took a tumble, but not too badly and here we are. Fact-The Small caps or Russell 2000 fell the hardest on more than average the daily volume (Distribution Day), with a bearish engulfing pattern. Fact-IWM also held the runaway gap. Therefore simply put; if IWM can hold here and firm up Thursday-not so bad. If IWM gaps lower and leaves a potential island top-not so good.
S&P 500 (SPY) Held the 10 DMA but a distribution day and not clear on whether it was a key reversal day or not
Russell 2000 (IWM) Said it all above-except one thing-wrote about 3 shooting stars in Tuesday night’s daily-good candlestick lesson
Dow (DIA) Close to the top of channel and could go either way-again, clearest signal should come from IWM
Nasdaq (QQQ) Taking a leadership role which makes this scenario even more interesting and certainly not ghoulish.
XLF (Financials) If clears 20.90 that will give this new life
SMH (Semiconductors) Held the 10 DMA. Not ruling this out to clear the recent highs and keep going
XRT (Retail) Still looks ok-again could be digesting or reversing-need another day
IBB (Biotechnology) Been looking here every time the market gets weaker-why? The thrill of the bull move is gone
IYR (Real Estate) Interesting Doji and a good place to look for a move over the 200 DMA
GLD Sitting on the 50 DMA
USO (US Oil Fund)Unconfirmed phase change to Distribution
XLE (Energy) still a place to look
UUP (Dollar Bull) Confirmed a bottoming formation if holds 21.40
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