July 26, 2013
By Mish Schneider
The Thing Ain't The Ring It's The Play Jake LaMotta
If there were ever a time to throw in the towel, it sure looked that way last Friday. But, the phase, bulls, overall good earnings reports, lack of volume on the downside-maybe all of the above, wouldn’t hear of it! So, a grind upwards began after the market was down almost 150 points to end the week in the green. And there was a shift in leadership as well. Thanks to Amazon and Apple, NASDAQ closed above 75.00 while the Russell 2000 or small caps, although with an inside day (when the range of the day is inside the day prior) closed right on a pivotal support level, 104 and red. Of course, the market is still officially working off topping action from July 23 and 24th with those highs still in place. A gap higher could easily put an end to that. Otherwise, keep eyes on those small caps as a possible early warning sign.
S&P 500 (SPY)Calling 169 pivotal, over 169.70 healthy and under Friday’s low trouble
Russell 2000 (IWM) Inside day. Has to clear recent highs still, holding the fast moving average and closed over the 104 pivotal area. Watch which way this goes as best clue
Dow (DIA)155.74 has to clear now, 155.14 the May 22nd high marginally held and like to see it hold Friday’s low
NASDAQ 100 (QQQ) Crossed over 75.00 filling the gap left on 7/19. However, still needs to clear 75.74 to be clear of the topping action from 2 weeks ago.
XLF (Financials)Ended the week lower from where it began after putting in a brick wall high midweek. So, unless this resurrects, have to continue caution on the long side, especially in this group
SMH (Semiconductors) Unconfirmed warning phase, which considering it crossed over the 50 DMA last Thursday and couldn’t hold there to end the week, not a great sign unless it gaps higher
XRT (Retail) Closed at the top of the channel and not above the high 81.55 which it must do to stay strong. But, right now, would say best chance of getting to those highs
IYT (Transportation) Holding the 50 DMA and could be forming a right shoulder for an inverted head and shoulders bottom.
IBB (Biotechnology) 196.97 has to clear but best action besides retail
IYR (Real Estate)Three lows last week at 67.53 which does seem a bit surreal. Some overhead resistance to clear before we can safely say that those were triple bottoms
XHB (Homebuilders) Inside day with a weak close and precisely why we are not raging bulls just yet
GLDConfirmed recovery phase
USO (US Oil Fund)36.88 gap low to defend or more downside
XOP (Oil and Gas Exploration) 2 Inside days.