May 6, 2014
Mish's Daily
By Mish Schneider
-Scroobius Pip
When we used to do a lot of sailing, before we moved to the high desert, we would look for white caps in the water as a sign to put on those life preservers and navigate for calmer seas.
Most investors have had life preservers on for some time now-especially those savvy enough to know that the historic diversion of the 4 indices coupled with the break from macro trading logic has kept the seas choppy all year.
Here we are again-a fairly significant drop in the market with S&P 500 and the Dow maintaining the 50 DMA (bullish phases), while NASDAQ retreats once again from the 50 DMA (warning phase) and the big news-no surprise to us-the small caps or Russell 2000s go into an unconfirmed distribution phase-breaking the 200 DMA.
I’m left with two thoughts here: First, will this break of the IWMs be anti-climactic following more in line with the sell when the market looks great and buy when the market looks lousy?
Second-The blow-off top possibility in the interest rates (TLTs) is still in play with a second inside day in a row. Is this when the rates depart more from the classic relationship with the overall market and will that ultimately be the market’s greatest gift?
S&P 500 (SPY) 186.45 bottom line low to hold
Russell 2000 (IWM) 110.66 is the pivotal 200 DMA- we wait 2 days for confirmation of a phase change
Dow (DIA) 163.30 support
Nasdaq (QQQ) An inside day albeit an ugly unless it recovers from here
XLF (Financials) 21.50 a point to watch
SMH (Semiconductors) Outperformed-could this be a first sign my semis are coming back? 45.00 number to clear
IYT (Transportation) A winner holding the 50 DMA and outperforming the market
IBB (Biotechnology) Inside day
XRT (Retail) This is so important to the market and did not have a good day-no matter what-we need this group at the party
IYR (Real Estate) Inside day near the highs
XHB (Homebuilders) Think Exorcist
GLD It looks better except that it is sitting so close to a monthly moving average failure and where I believe the next money is-short
OIH (Oil Services) Sideways near the highs
XLE (Energy) New high
XOP (Oil and Gas Exploration) holding near the highs
TBT (Ultrashort Lehman 20+ Year Treasuries) 2 inside days
Every day you'll be prepared to trade with:
