About a Quart Low in the Mood Department :)

February 2, 2014

Mish's Daily

By Mish Schneider


The month ends with the market’s worst performance for a month since May 2012. However, the lows of last week were ultimately defended on Friday signaling that our bipolar patient-aka-the market, could have a mood swing either way come Monday. Hopefully, the market finds its way to some of the good drugs the pharmas have been pumping out lately.

But, investors must be prepared for the worst as we have 4 heavy duty days of distribution in volume-over the daily average volume and all in a span of the last two weeks of January.

To regain confidence, we must look for the major culprit in this decline-emerging markets. The ETF EEM is where eyes can be. A clearance of Friday highs will be a good confirmation that perhaps, at least for that sector, the worst is over temporarily. The operative word though-temporarily.

The emerging market chart pattern also indicates a breakdown over the course of the last 2 ½ years which means a move under 35.00-very ugly indeed.

If you would like to know more about the cycles we at Marketgauge are watching and have already booked gains in-please take advantage of our special offer running right now!

S&P 500 (SPY) Yes held the weekly lows, but not exactly jumping for joy on that news. A gap below on Monday-not good.

Russell 2000 (IWM) Let’s put it this way, a gap under 111.02, and we can see a really big dump. But, the yin and yang (Chinese New Year), we should also say that over Friday’s high and a very long term trendline will have been defended.

Dow (DIA) This might be the one index I wouldn’t look to short on a weaker open so close to the 200 DMA

Nasdaq (QQQ) I can hardly believe my eyes, but this confirmed the bullish phase closing out the week over the 50 DMA. No bubble in tech and social media here.

XLF (Financials) Broke down under the bear flag but, held the weekly lows

SMH (Semiconductors) I always want to love semis and still do, but if the market corrects, will wait for a move to 40.00 before reentering long

IYT (Transportation) confirmed bullish phase so another place that looks a lot better

IBB (Biotechnology) Was last week the peak? Could be based on the weekly close-something to watch for

XRT (Retail) If this moves over Friday’s high then maybe we have seen the bottom here. Maybe

IYR (Real Estate) Hard to read even with the outperformance on Friday.

XHB (Homebuilders) Reversal off the 200 DMA but now, has to clear the 50 DMA

GLD Looks good then looks worse but still over the 50 DMA

USO (US Oil Fund) Doji hammer candle-34.50 good place to hold

XLE (Energy) Very vulnerable

XOP (Oil and Gas Exploration) A group I loved, now looking much heavier

TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs unconfirmed phase change to accumulation

UUP (Dollar Bull) Confirmed phase change back to recovery

FCG (First Trust ISE Reserve NatGas) Not a bad group to watch

For more detailed analysis join me, along with hundreds of other subscribers, at Mish's Market Minute and get my daily trade picks, trade alerts, training videos, and exclusive analysis tools. Sign up for Mish's Market Minute now and get a free 2 week trial!

Improve Your Returns With 'Mish's Daily'

Michele 'Mish' Schneider

Every day you'll be prepared to trade with:

  • Unique insight into the health and future trends in markets
  • Key trading levels for major ETFs
  • The 'Modern Family' advantage
  • Actionable trading ideas in stocks and ETFs across all asset classes
Subscribe Now!

Leave a Comment or Reply

Your email address will not be published. Required fields are marked *