"An Ounce of Performance is Worth Pounds of Promises" $SPY $QQQ $IWM $DIA

December 3, 2013

Mish's Daily

By Mish Schneider


Quote by an idol of mine-Mae West

I wouldn’t call it extraordinary volume, but volume did come in on the S&P 500, Dow and NASDAQ giving them all a distribution day. However, the small caps or Russell 2000s, which tipped us off on this correction, not only held the fast moving average, but after Monday’s decline on decent volume, did not at least post a second distribution day (when the volume exceeds the day prior and the price closes down from the previous closing price). Therefore, as the bullish trend is not at threat of abating currently, one must take this action for what it mostly likely is-a healthy correction. That’s not to say the market will reverse from here and roar to new highs-but, I would be looking for outperformers, especially in certain sectors and groups.

S&P 500 (SPY) After a 2-day correction, today’s high becomes an important area to clear.

Russell 2000 (IWM) 111.60 pivotal

Dow (DIA) After a 2-day correction, today’s high becomes an important area to clear.

Nasdaq (QQQ) Vote for the index most likely to succeed if clears today’s high

XLF (Financials) 21.04 area held and should continue to do so

SMH (Semiconductors) Here is a group to focus on-never ran with the indices to new 2013 highs and still from a longer term perspective, has miles to go

XRT (Retail) Hard to get negative here in December making this another place to look for setups

IYT (Transportation) Doesn’t look done correcting

IBB (Biotechnology) Went from 213 to 225 so a correction midpoint is around 219. Today’s low 220.07

IYR (Real Estate) Not out of the question for a pop if it clears today’s high clears

XHB (Homebuilders) The 50 DMA is key here now

GLD Held up, but not by much.

USO (US Oil Fund) Textbook island bottom

OIH (Oil Services) In the warning phase, 47.50 has to hold

XLE (Energy) Another group to go to especially since the bull phase is well intact

EWG (Germany) Possible island top if confirms on Wednesday

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