Evening Watch for Mar. 13th 2012

Mish Schneider | March 12, 2012

I took a short break and apparently, so did the market by the look of things. S&P 500 (SPY) closed with a nearly perfect DOJI day. NASDAQ 100 (QQQ) closed nearly unchanged from Friday. Russell 2000 (IWM) had an inside day closing slightly in the red. Looks like digestion as once again SPY and QQQ reach overbought on the weekly RSI while IWM remains the wildcard.

NASDAQ (QQQ) There is no reason to expect the Q's to give up their leadership position so the bulls should look for the Q's to hold above Friday's lows (64.82) and then the 64.55 area where you'll find the 10 DMA. 7 of the last 9 days have a daily high between 64.94 and 65.12 so this area now serving as significant resistance. Subs: Pivots Negative

S&P 500 (SPY) The late February high of 138.19 is the key number to clear for the upside, and support should be anticipated at Friday's lows and the 10 DMA of 136.90. Subs: Pivots Negative

The Dow (DIA) A break below Friday's low, 128.94 will also put it back below neutrally sloped 10 and 20 DMAs. That's your first red flag to watch out for. The next key level of support is 128.50.  Subs: Pivots Positive

Russell 2000 (IWM) After the inside day, key levels for it to hold are 81.00. Expect resistance at Friday's highs of 82.15 as well as 82.40 and 83.00. Subs: Pivots Positive

ETFs:

GLD Looks a bit like Christmas with a big red candle a couple of weeks ago followed by the big green candle on Friday. Typically, after a huge stretch of the ATR, an inside day ensues. Subs: Pivots Negative

XLF (Financials) It squeaked out a second weekly close over the 200 week moving average, an average it has been below since Nov. 2007! Let's see if it can move away from the 14.80 level that has held it down for the last 4 weeks.

IBB (Biotechnology) A move over 120.10 takes out an important trend line from the February 2012. A close above this trend line should grab the attention of swing traders.

SMH (Semiconductors) Closed ominously under the 10 DMA which is sloping down. The Q's have managed fine without any leadership from SMH thus far, however a rollover in SMH from this level may be an important warning sign for the bulls.

IYT (Transportation) Remains in a weak warning phase until it clears or fails from the 50 DMA. With an inside day and bearish engulfing pattern, Friday's range remains a pivotal day for the next swing's direction.

IYR (Real Estate) Broke over 61.00 and at midmonth, back over the 80 monthly moving average. Second close above a trend line on the daily chart which for now, indicates a good place to go to buy dips.

XRT (Retail) Inside day at the new highs.

USO (United States Oil Fund) Gap lower and remained under S1 al day, which means unless it clears 40.87 level, could see a return to last week's low 39.91.  

TBT (Ultrashort Lehman 20+ Year Treasuries) The 70 EMA has been amazing resistance on a closing basis. Last time it closed above that moving average was 11 months ago to the day. 19.36 is the pivotal area to close above.

Longs: Coming back from the break, see that many recent picks continue to outperform the market: TSLA COST SPG TWC SFLY LNKD IBM AAPL among others. Now, new selections have outperformed today and/or corrected for 2 days yet remain in a Condition 1.

BG 2 Inside days and positive pivots at 66.55. Max risk 66.00 and if clears today's high, recent high 68.27 with room to 69.25 August high and possibly beyond. Day to Short-term Swing.

COP 2 days under the FTPS at 77.37 with max risk S1 76.93. After 2 DOJI days, if clears above this area or over today's high 77.80, could see another leg up with some resistance at 80.00 then 84.50. Day to Swing

CVX 2 days under the FTP at 109.71 with max risk today's low and it should clear today's high 110.00. Then could see a test of all time high 110. with another 10.00 move up possible. Day to Swing

LO Positive Pivots at 129.86 with max risk 128.59 Friday low. All-time high was made on February 29th at 132.61 which if clears can take this to 136 next and possibly higher. Day to Swing

CSTR The pivots are positive at 61.71 with max risk 60.97 the 10 DMA. Low volume 6-day consolidation sets up for a run to new highs possible with all-time high in 2010 at 67.56.  Key levels to clear are Friday's high of 62.06, the outside day high of 62.39 and then the 52-week high of 62.79. This can be quite volatile so trade carefully. Day to Swing

ESRX Inside day with negative pivots but held S1 which means as long as today's low holds, would even consider a reversal to control risk since this is a bit wild. If can clear 55.09 recent highs, 2011 high 60.89 and possibly higher in the works. Day to Swing

Honorable mention: Must clear: PNC (59.82) CRM (148.29) CF (182.51) PAY (50.67) GS (2 inside days 117.89) Positive Pivots Opening Range Reversal: WTW* REGN TIF XOM

Shorts: BTU OPEN CNX GMCR ATI EQT among others have remained weak therefore, searching for new shorts brings me to unconfirmed phase changes to bearish or ones that are negatively stacked an struggling in their recovery or accumulations phases.

SINA Bearish engulfing pattern after an attempt at the 200 DMA plus a slingshot trade as it made new 60-day highs only to close on the lows. Pivots are negative at 76.59 and should not clear the pivots as the tightest risk especially under today's lows. Support at the 10 DMA at 72.11 then the 70 EMA at 68.25. Day to Swing but would like to see the 50 DMA slope down.

RRC Negative pivots at 62.48 after taking a bit of a dive today with max risk R1 63.03. Under today's low 61.95 breaks the 200 DMA with next support 50 DMA 60.77. Day to Mini for now

CAVM (Narrow Range 12) Confirmed bearish phase now under the 200 DMA. Negative Pivots at 32.89. Should not clear R1 33.18 and under today's low. Recent support 31.16 then could see drop to 30.00 before it begins to register oversold. Day to Mini

HAL Negative Pivots at 34.61 with max risk 34.97 R1. Under recent lows 33.80 could see a drop to 32.00 level. Day to Swing

RVBD Negative Pivots at 26.80 with max risk at R1 and today's high 27.23. Next support 23.00 then October low 22.14. Day to Swing

Honorable Mention: (Opening Range High Failure Only) POT SLB NSC (Hammer candle must break today's low) DECK (Must break today's low) AMZN CHRW

Goodnight!