May 13, 2014
By Mish Schneider
Like counting sheep-here are the thoughts in my head each night:
After an initial scare, most major bull markets in U.S. equities also occurred during periods of rising interest rates, which of course hasn’t really happened yet, (market seems to be more scared of falling rates right now) and we are still working on a second swing high in TLTs from last week.
Since the market hasn’t really had a correction-could this diversion be that there is no correction and the market will power up to 2000? Is this the start of a bigger correction? Will we just trade range bound until there is some other watershed event?
Then there is the volatility index-today, Tuesday it made yet another new low and then turned to close near the intraday high. Big eyes there Wednesday for clues (and low risk trade) or perhaps complacent folks waking up.
Before we get hysterical, the small caps aka The Other Sister, had an inside day above the 200 DMA. Low volume all around-could just be digestion.
S&P 500 (SPY) New highs and a doji day by the end of the session. Will 189.70 hold or will it drop again to 188.35
Russell 2000 (IWM) Inside day over the 200 DMA at 110.80
Dow (DIA) Possible shooting star-reversal or launching pad
Nasdaq (QQQ) Cleared the 50 DMA for an confirmed phase change to bullish which means 87.90 is key support
XLF (Financials) confirmed phase change to bullish
SMH (Semiconductors) Ugly confirmation of a bullish phase
IYT (Transportation) Expect digestion form here and not necessarily anything more than that
IBB (Biotechnology) 230 pivotal area and 235 next hurdle
XRT (Retail) confirmed phase change to bullish with the 50 DMA at 84.25
IYR (Real Estate) Possible reversal from new highs-70.60 is the fast moving average
GLD Incredible amount of time in a range which at some point, will break one way or another
USO (US Oil Fund) looks good-let’s see what it does at 36.75
XLE (Energy) Doesn’t look done moving up
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs corrected as I thought it might and just touched into resistance
UUP (Dollar Bull) Up so much last several days, now at resistance levels
KRE (Regional Banks) Inside day and still vulnerable
IFN (India Fund Inc.) 23.49 the 2014 high
Every day you'll be prepared to trade with: