Yo-Yo Market Action

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Today’s Mish’s Daily was prepared by Geoff Bysshe, co-founder of MarketGauge.

Tuesday the stock markets will close at 1:00 EST so expect a very light trading day and action similar to today’s consolidation. With the exception of IWM’s impressive sprint higher in the last half hour, the entire trading day’s range was defined in the first hour in the four major index ETF’s

Worse than expected ISM data sunk the markets’ positive open, but it couldn’t keep the markets down. The SPY, QQQ, and IWM all closed higher despite the negative news. Having traded over the prior day’s highs and closed for the second day over the 50-day moving average, all 4 markets are now back in a confirmed Bullish Phase.

With the shortened trading session, watch for reversals and an upward bias. After all, who wants to push down the market going into the Fourth of July Holiday – seems almost un-American. On the other hand, taking profits is certainly American, and there should be plenty to take after the last three days, so markets could consolidate.

S&P 500 (SPY) 136.85 is significant resistance and today’s low of 135.50 should offer support.

Russell 2000 (IWM) On a daily basis this was the leader today and on a longer term basis is the only one to have broken the trend line from the 2012 highs. It could use a rest and 79.73 should be support in a digestion day. The next level would be today’s low at 79.28 down to the round number of 79.

Dow (DIA) struggled today. If it perks up it has resistance at 129.30. If it gets weak, Friday’s low of 127.44 should be support.

NASDAQ 100 (QQQ) 63.50 should hold, and 63.20 better hold. On the upside it needs to clear 64.57 for new leg up.

ETFs:

GLD The 50 DMA kept a lid on it today. Under 154 could be low risk short. Subs: pivots now negative.

SLV Subs: Yesterday it was describe as an “Inflection point”. Today had an inside day. Breakouts are tough on half days, but this is ready to move either way. 26.40 is the key number on the downside, 26.80 on the upside.

XLF (Financials) Second close over the 50 DMA and closed over 14.63 even without any help from its biggest component (JPM). Now it should hold 14.45. Subs: holding the core.

IBB (Biotechnology) Mergers in this space set this one fire today with continued good volume coming in the last 2 hours of trading. Let’s hope it’s not too exuberant. Wait for a pull back.

SMH (Semiconductors) Inside day on a death cross. You don’t see that very often. I see lots of support down to 31.60, and could pop if it clears 32.26.

XRT (Retail) Today’s close above the 59.30 level is impressive. 60.00 is big level. Don’t be surprised if it gets there quickly, but if it reverses and takes out 58.80, then 57.00 may come just as quickly.

IYT (Transportation) Got hit hard today but recovered nicely. Subs: Long for swing from 90.05

IYR (Real Estate) Beautiful reversal pattern on the day’s low. It need time to digest and has run up into major resistance levels around 64.80.

USO (US Oil Fund) Doji inside day. Key levels are 34.56 on the downside and 30.70 on the upside.

OIH (Oil Services) Consolidating but not worth focusing on until it reaches 36.60 or 34.40.

XLE (Energy) A break over 66.70, it could run to 68.70 quickly.

TBT (Ultrashort Lehman 20+ Year Treasuries) It's all about 16.12

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