November 8, 2013
By Mish Schneider
From your Hot Air Balloon pilot: “An experienced pilot will bump along the ground to stop the balloon gradually, minimizing the impact.” Then, all hell can break loose! And so it goes. A cycle ends and ends badly with the scariest of all looking candles in all indices. Huge distribution day in volume and not the kind that illustrates a blow off to the downside. Looks more like a run for the exits and the trust broken. Two rays of hope can come from where the warning began-the Russell 2000s. The fell to the 50 DMA. And, NASDAQ which is still holding the runaway gap from October 18th. Bottom line, if those support areas fail, the market is in for more stormy weather keeping those balloons anchored to the ground. If the support areas hold, then what fun it will be to start looking for buys-especially on those instruments that held up ok.
S&P 500 (SPY) 173.60 next support and a move over recent high would be about the only indicator to trust here
Russell 2000 (IWM) 106.88 the 50 DMA
Dow (DIA) I have been writing and showing my subscribers the top of the channel here. We saw that it would head there-and now we see that it did and hit the reject button big time!
Nasdaq (QQQ) 80.87 is the high before it gapped up. If that is not filled, very good sign. Otherwise, will make the 50 DMA here compelling
XLF (Financials) 20.39 support tested and marginally held. The 50 DMA is 20.29
SMH (Semiconductors) I would hardly doubt that the longer term reversal trend to the upside is over. But, I will say those who missed that boat-looks like you will get another shot at cheaper levels
XRT (Retail) That “Could be a reversal candle, but has to confirm”-Yup Thursday
IYT (Transportation) That-“Could be a reversal candle, but has to confirm”-Yup yet again
IBB (Biotechnology) 191.29 last peak low made in early October.
IYR (Real Estate) Back to an unconfirmed warning phase. However, if holds above the 50 DMA, not a bad place to look for a low risk entry
XHB (Homebuilders) 30.00 now the support area to hold.
GLD These doji candles just prove that this has fallen out of favor to trade
USO (US Oil Fund) Perhaps a sign of deflation
XOP (Oil and Gas Exploration) “Heading to the 50 DMA”-wrote yesterday-more like heading and breaking
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs went back to an unconfirmed recovery phase
UUP (Dollar Bull) Unconfirmed phase change back to Recovery-yo-yo
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