You're Lunching at "21" and Watchin' Your Diet

---

Lyric from This Could Be the Start of Something Big Steve Lawrence

It was all about the Dow (DIA) as we have featured all week. After yesterday’s new 60+ day low followed by the close very near the intraday high, we noted that a gap over the 200 DMA would be something to follow.

However, was that enough? Let’s examine the consistent layers we give here every day. First, volume-we needed an accumulation to reverse the 5 strong distribution days the last two weeks. Did not happen. Second, phase-we needed a phase improvement in NASDAQ particularly since it is closest to the 50 DMA. Did not happen.

What did happen though concerning phase is an IMPROVEMENT in DIA. That crossing the 200 DMA helps some of the pressure for sure.

Sectors and groups-No phase change in any of those. Financials, XRT closed at 21.00-great bounce off the lows and a pivotal area to look at Friday after the jobs report dust settles.

All in all, best case, the start of something bigger and better. Worst case-the sellable rally before the market resumes the correction.

Also, the jobs report comes out tomorrow morning at 8:30 EST.

Palpable suspense!

S&P 500 (SPY) Confirmed a slingshot low today. Needs to clear the Feb. 1 high as a confirmation of strength.

Russell 2000 (IWM) Of the major four, this is currently the weakest. It has the most work to do to get over the February calendar range. Indecisive, we’ll look for our confirming clues elsewhere.

Dow (DIA) The high of the February calendar range needs to clear at 156.76. The 200 DMA sits at 154.56 as support. Confirmed the slingshot low.

Nasdaq (QQQ) Clearly the strongest index. It is nearing the 50 DMA. If this takes out the Feb. calendar range, it will also enter a bullish phase.

XLF (Financials) Strong bounce after 2 inside days. Nearing the Feb. 1 high. Great news for the market if the financials recover.

SMH (Semiconductors) Close to taking out the 10 DMA and the Feb. calendar range. But, is heading into resistance at the 41.50 area.

IYT (Transportation) Needs to clear 131 to clear the 50 DMA and the Feb. calendar range.

IBB (Biotechnology) Inside day and one to follow if it breaks out. Could make a run for the roses.

XRT (Retail) This was the most beaten up ETF. Still in a distribution phase but, did take out the Feb. high. Accumulation day in volume but, still reason to be cautious.

IYR (Real Estate) Nice bounce out of the two inside days and took out the Feb. high. Not surprising considering the action in bonds. It is beginning to form a wedge pattern.

XHB (Homebuilders) Broke out of a trendline and cleared the Feb calendar range.

GLD Inside day. Serious consolidation in the recovery phase. Small wedge forming

USO (US Oil Fund) Wedged between the 200 and 50 DMAs. In a warning phase. Paused. We are watching for a break of the 200 or 50 DMA. 34.40 is support.

OIH (Oil Services) 46.26 is the upward sloping 200 DMA. Nice move today.

XLE (Energy) Pushing against the upward sloping 200 DMA. 83.65 takes out the Feb. calendar range and the 200 DMA.

XOP (Oil and Gas Exploration) Holding the upward sloping 200 DMA. 64.25 area should hold.

TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs failed the 200 DMA-another puzzling piece of the puzzle

UUP (Dollar Bull) Holding the recovery phase. 21.67 is the 50 DMA that needs to hold.

For more detailed analysis join me, along with hundreds of other subscribers, at Mish's Market Minute and get my daily trade picks, trade alerts, training videos, and exclusive analysis tools. Sign up for Mish's Market Minute now and get a free 2 week trial!