As we head into the Year of the Horse, thinking market only here (I was born in a Year of the Horse), is this what we call beating a dead one?
Startling move in Russell 2000 as it went from new highs on Wednesday, to a heart palpitating drop to the 50 day moving average on Friday! Of course, the bigger they are, the harder they fall.
What’s next? I’ve been down this block before-the one when the rush to the exits happens, then the phase change to an unconfirmed weak warning (SPY DIA), oversold on those two on a daily relative strength indicator, more selling, then-a climax bottom.
What does a bottom look like? New lows, typically a 60 day or more new low, a reversal from the lows intraday, with double or more average the volume, followed by confirmation the next day.
Til then, hold back the reins!
S&P 500 (SPY) On 12/18 the SPY dropped to 177.32. Friday low, 178.83. Not a bad spot to watch as we have to think more selling is still around the corner Subscribers: Negative pivots in all
Russell 2000 (IWM) Not even close to that 12/18 low and held the 50 DMA. Not cheering, mind you-more noting how much this might have to bounce on Monday-and if cannot, a good place to see support
Dow (DIA) 158.11 the 12/18 low here Friday low 158.48.
Nasdaq (QQQ) The 50 DMA at 85.99 is first place to look-either for a hold or a precipitous drop from there
XLF (Financials) 21.00 support
SMH (Semiconductors) 41.50 some support if it breaks the 50 DMA then returns through it on Monday
IYT (Transportation) Wait-new highs Thursday followed by a huge dump Friday? And you thought trading was easy?
IBB (Biotechnology) Actually, holding the fast moving average
XRT (Retail) On the 200 DMA and oversold on the weekly relative strength indicator
IYR (Real Estate) This fell with the market, but into some support at Friday’s lows
XHB (Homebuilders) The power of inside days-once it broke Thursday’s low, it was south with support around the 200 DMA
GLD Even though this outperformed, somehow, I thought it should have done better-but, for now, any dip to around 120.45 considered a buy opportunity
USO (US Oil Fund) Dropped to the 50 DMA making this a fave for Monday if holds Friday’s lows
XLE (Energy) One major concern, is the possible double top from November highs and late December highs. Although 84.00 some interim support, would look to sell a rally closer to 85.00
XOP (Oil and Gas Exploration) Maybe a shot to hold Friday’s low with a group that I am still friendly to
TBT (Ultrashort Lehman 20+ Year Treasuries) 70.15 is a very important support level
UUP (Dollar Bull) Confirmed bearish phase
KRE (Regional Banks) One that held the 50 DMA
CORN (Corn) Subscribers: Green in a sea of red-Monday should be interesting
BAL (Cotton) Spent the week consolidating a range. 55.55 high 54.59 low-good one to follow the way the range breaks
JO (Coffee) Subscribers: 22.25 is the 50 DMA and a great risk should this clear R1 and Friday’s high
Bye for Now!
