Latest Commentary 3

Mish Schneider | March 22, 2011

By now you know that I will be on vacation Friday and Monday, back on Tuesday. Geoff Bysshe and Daytrading with Hotscans will be available to you by going to www.marketgauge.com, click on Recommendations, click on Daytrading with Hotscans, click on Live Trading Room. Geoff uses a live chat format so you will be able to join the dialogue. If you have any trouble logging in, please contact Mary@marketgauge.com.

Here is an abbreviated Evening Watch. On the same site, Geoff will provide a Focus List tomorrow, Monday, and Tuesday morning.

During today's live coaching session, I did a step-by-step analogy between the volume patterns I found in SPY from July 2010 and March 15, 2011 until today. Now, I  see a departure in the analogy as we closed back above the 50 day moving average although we need two days to confirm into a bullish phase. And, we posted yet another Accumulation day in volume. I would now look at 130 as pivotal on an intraday basis and a close necessary above 130.70 tomorrow to confirm the bullish phase. QQQ had an Accumulation day in volume, but just touched and closed beneath the 50 day moving average at 56.90. Now I see 56.20 as pivotal, a move above the 50 day moving average encouraging. Once again it'll be a question of where it closes. The volume coming in to the market today is a good sign. IWM has been the bright star for several days, and as long as it maintains above 80.40 the 50 day moving average, expect some consolidation while SPYand QQQ either catch up or begin to roll over. Since I have found the Eminis helpful when analyzing technical information, 1297 is the 50 day moving average and the number that needs to hold. Above 1305, we could easily move up to 1320. Below 1297, next support at 1283.

Looking at ETF's: XRT finally busted out of the consolidation on an intraday basis, but could not close above 49.53 which was the high that was made on March 4. Now 49 is a number that must hold, and watch for continuation to the upside and to see if you can close above 49.53.

SMH now above the adaptive moving average yet beneath the 50. The slope on the 50 is pointing up so at this point I have no reason to believe that it won't hold above 33.90 and eventually make its way up to 34.85 and beyond. Since we know that the phase is still warning, I would be wary if it breaks down and closes beneath 33.90.

FAS also has a ways to go. First area of resistance is 30, above that 31 and it must hold 28.

IBB had a great rally today, both XLE and OIH stayed firm, and USO could be looking a bit overbought as it approaches the recent high at 42.83.

If you were long either GLD or SLV you probably exited under the opening range low. Looks like it needs to consolidate perhaps at slightly lower prices before the next move is clear. Back in early January, SLV spiked to a new high, and then proceeded to sell off. This time however, prices are much higher than the adaptive moving average. Therefore it could sell off to around 34 and still look very strong.

Picks: Only a few that look the most interesting as far as having potential to move one way or another.

Longs:

XEC**although it closed down on the day, it did have an inside day and is above the 10 in the 50 day moving average both of which are sloping up. It now has two days under the FTP, will a wall of support at 109. Since it traded beneath S1 yesterday, would take half a position over the FTP especially if that lines up with an opening range breakout, and add if you can get through R1. I imagine the pivots will be negatively stacked, but since this is in a strong condition, as I explained in today's live coaching, I have found that a starter position over the FTP provided the risk is there works out well. Other stocks in this area that look interesting and had an inside day-CVX and APA. Day to mini.

NTES after yesterdays inside day, broke out above the trendline which was coming down from the high. Interesting is that it put in a DOJI day today. Never had an opening range reversal or an opening range breakout. Would  watch for this one to move tomorrow. Pivotal area is 46.25 and a good place of support. 46.60 is where it both opened and closed another important area to look out for. And a move above today's high of 46.98 and expect it to continue up to the highs that were made February 25 at 48.70. If this clears that area and the market stays firm, has a substantial head and shoulders bottom with a significant measured move to the upside. Day to swing.

FSLR if I weren't going out of town I would've stayed long. Above 152 should get up to 153.12 where the 50 day moving average is and above that the next area of resistance at 160. At this point day trade only.

SOHU** closed back above the 10 day moving average at 81.62 now your wall of support with today's low 81.56. 82.75 to 83 is a pivotal area, and a move above 84 breaks out of a trendline from the high and should give it a boost up to 86.50 and possibly beyond depending on what the overall market does. Day to mini.

Shorts:

RIMM sold off after the market close due to poor earnings. Recent low was  59.38 and the last swing low before that was 58.57. A gap beneath those prices, and we're looking at the 200 day moving average at 56.45. A gap under there, and I would certainly be looking to the two minute opening range fade or follow. Fade if it comes back through the 200 day moving average and follow if that becomes an area of resistance. It is also possible that stocks like TXN which rallied up to the 50 day moving average today and NVLS will come under pressure as well.Day to mini

SPG rallied up to the 50 day moving average, and has the 10 day descending down which looks like it will cross beneath the 50 especially if there is weakness once again in the real estate sector. If the market sells off tomorrow, this would be one to go to as a short possibility. BXP as well. Recent support at 102.18, resistance now at 104.15. If this comes in above 104.50 would not want to be short. But if you cannot get back to the 50 day moving average and it begins to roll over, would not be surprised to see a move down to 100. DayTrade

Have a wonderful weekend. Thank you for your support and kind words. I look forward to seeing you all again next week!