Evening Watch List for September 28th, 2011

Mish Schneider | September 27, 2011

There are conflicting signals and a tug of war. First, there is the impressive hold of the August lows and a return to the channel that had broken down in the indexes (SPY chart illustrates). Then, there is the phase-clearly still negative except for the QQQ which went back to recovery although unconfirmed. Then there isslope of the 50 DMA all still negative. Then there is the volume-SPY IWM DIA had an accumulation day, QQQ had one yesterday not today. Overall though, volume is light. Then the leaders AAPL AMZN-down today. At this point, the rally has been led by beaten up stocks and sectors/groups that were oversold. Plus a couple of ones that had good setups like IBM. Consumer confidence remains low.

The "twist" flattened the yield curve which is non-inflationary, but commodity related stocks rallied with the strength. Banks firmed as well. European worries still loom. It seems that if European worries are put to bed, a rally in instruments that will benefit from the twist will prevail. GLD should drop. Right now, if you are a longer term trader, the next big move is unclear.

SPY 121 is the 50 DMA to watch with 116.40 first area of support and 114.50 the 200 weekly moving average major support.

DIA 114.73 the 50 DMA, first support 110.70, then 108.00.

QQQ In weak unconfirmed recovery phase. 54.86 the 50 DMA which if breaks will look ominous, overhead at the 200 DMA 56.30.

IWM 65.30 the 200 weekly moving average support. Overhead resistance at 71.80 t he 50 DMA


GLD If breaks 159.60 considering the potential double top still in play overhead, could see more downside with eventual test of the 200 DMA at 148.60 area. If firms to 165, would also considering selling the strength against the 70 EMA

SMH 30.00 big area now to hold if this can continue to lead.

IYR 52.40 held but still underperformed the market. Until it clears 56.00 the possible double bottom looks like that- a possibility only.

IYT Crossed 200 weekly moving average. A close over 80.00 next hurdle . otherwise back under that moving average trouble.

XLF The real trend reversal is over 13.50. Needs to hold above 12.00 though.

TLT**Landed on the 10 DMA. If breaks above 117.50 could see pop back up to 118.89 the gap.

OIH Has more work to do since it still has a gap to 118, the August low to fill if we are looking at anything like a bottom. Otherwise, working off oversold conditions only and under 111.60 looks vulnerable

Longs: Gotten shaken out of weaker longs but still holding ¾ SPG ¼ UUP and the options since a long term trade. Hard to buy a gap that big for anything longer than a daytrade. Will once again watch the indexes for direction. Lack of picks right now suggests good time to stay mainly in cash. Note: Live Coaching tomorrow 12:30 ET

RL Still Condition 1 but fell with the pressure at the end of the day. Landed on the 10 DMA at 147.34 so once again, with positive pivots now, worth watching for OR reversal against the 10 DMA or if rallies above the pivots at 149.70. Recent highs 154.62 Day to swing

MA Inside day and under the positive sloping 10 DMA at 341.54. Positive pivots at 337.73 which want to see hold along with today's low. Over today's high could see 356 nearest next resistance. Day to mini

IDCC Inside day and holding the 200 DMA at 50.15 which gives a good risk point with positive pivots at 50.89. Over R1 54.73 must clear to keep you in for anything more than daytrade. Day to mini

Honorable Mention: GMCR (Through R1 and today's high 107.78) TSLA (must clear 27.00) OR Reversal IBM NKE CF DECK VFC CBST HLF ACN* Earnings

Shorts: With so many having positive pivots, would rather wait for setups before new short recommendations.

Honorable Mention to watch for breakdown under S1 ACOM GOOG OPEN BIDU WLT