August 5, 2013
Mish's Daily
By Mish Schneider
The market closing numbers for Monday represent even more diversion than they did last Friday. Most of the salient sectors and groups that drive the economy closed weaker. The financials, semiconductors, transportation, real estate and oil and energy sectors all closed red. Even retail and biotechnology closed down. In fact, only the ultrashort to rates, TBTs and Oil and Gas Exploration closed in the green. I wouldn’t say there are any topping signs in the individual indices; however, keep yourself alert to 1) A blow off rally with double the average volume, 2) A reversal candle after new highs are made 3) An island top (gap up then gap down the next day) 4) Good old fashioned chart resistance such as a double or triple top. Otherwise, as we head into August with this low volume and basically choppy price action intraday, the best strategy will continue to be to trade individual instruments each on their own merit and make sure you can step back with a longer term view by noting the phases, risks and potential targets. Option 2 is to catch the quick momentum in a more daytrading/scalpers purview.
NOTE: I am heading out on vacation until Labor Day Weekend but you will not have any interruption of the daily as Geoff Bysshe, President and/or Matthew Mullins, Assistant Director of Trading Education and Research of MarketGauge will be filling in for me. Have a wonderful rest of August. Trade well!
S&P 500 (SPY) Inside day near the highs and with low volume to boot.
Russell 2000 (IWM) New highs-a parallel universe to the sectors/groups
Dow (DIA)Inside day and resetting on the fast moving average
NASDAQ 100 (QQQ) Highest level since 2000 and another new high close for 2013
ETFs:
XLF (Financials)Sideways with the high candle from 7/23 still suggesting topping action until it clears with 20.65 key support to hold
SMH (Semiconductors) Inside day. After the peak high 7/17, we have a gap overhead and some solid resistance to clear with 38.20 level support to hold
XRT (Retail) Resting
IYT (Transportation) Correcting and trading inside the big green bar from August 1st
IBB (Biotechnology) Resting
IYR (Real Estate)Resting and not in a good way. Bear phase now after last week’s death cross
XHB (Homebuilders) Inside day. 31.06 next hurdle and 30.00 key to hold.
GLDFilled a gap from July 19th so has to hold here or resumption of the direction of the phase.
USO (US Oil Fund)The topping candle from 7/19 remains intact for now with some support at 37.50 to watch for a hold
OIH (Oil Services)Overhead resistance
XLE (Energy) 84.00 is key
XOP (Oil and Gas Exploration) New highs and new high close since 2011
TBT (Ultrashort Lehman 20+ Year Treasuries) As this came in higher, it keeps the notion of higher rates more the sentiment of the market
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