December 6, 2013
By Mish Schneider
Theory of a Deadman-Crutch
All the four indices had inside day trading ranges (when the range is literally inside the trading range of the day prior). What does this mean? Pause in the action-breath held before the jobs report-you do realize every jobs report is the SINGLE MOST IMPORTANT one of all, right? Seriously, Friday’s report comes on the heels of some good economic news (The GDP, Jobless claims); hence, the fear of tapering since the US economy may no longer need the crutches that the FED has supplied. Psychologically, a great jobs number seals the taper fate. However, even after we lose the crutches, don’t we get some physical therapy? Our muscles atrophied, can the FED really afford to put us on the fast track right away? Doubtful. Be that as it may, my tells-small caps (Russell 2000s) closed green in its inside day. The Real Estate ETF also closed green with an inside day. One more push most likely indicating a near-term (at least) bottom. Finally, rates firmed with the long 20 Year Bond ETF (TLT) sitting on the 2013 lows. Rates certainly look poised to firm some more. Questions are, how much, how fast and is that so bad?
S&P 500 (SPY) The last correction in mid-November-the low made was 177.98. Inside day and it still needs to clear the resistance pivot overhead to change course-180.50
Russell 2000 (IWM) Really-112.43 has to clear to get excited
Dow (DIA) After a 4-day correction, inside day therefore 159.52 becomes an important area to clear.
Nasdaq (QQQ) 84.65 key support with 85.77 point to clear
XLF (Financials) 21.04 is the number I am watching for support
SMH (Semiconductors) 41.00 area now pivotal and really close to taking out 41.44 the 2013 highs
XRT (Retail) Looking a bit heavy unless it clears 87.75
IYT (Transportation) Inside day digestion
IBB (Biotechnology) Made a good 50% correction from breakout over 213 to the peak high-really good one to watch
IYR (Real Estate) Inside day with eyes over the fast moving average
XHB (Homebuilders) Inside day with the 50 DMA still important
GLD It still looks horrid but have to see it break the week’s lows now to negate the reversal candle from Wednesday
USO (US Oil Fund) Rallied to the moving average resistance.
OIH (Oil Services) Correcting in the warning phase, but a case with the longer term charts still looking ok
XLE (Energy) Correcting in the bullish phase, provided the 50 DMA holds up
XOP (Oil and Gas Exploration) Correcting in the warning phase, but a case with the longer term charts still looking ok
TBT (Ultrashort Lehman 20+ Year Treasuries) Over 80.00 will look like crutches off
FXI (China) I need a weekly close over 40.00 to get excited
SGG (Sugar) Possible Slingshot low if holds 2013 and today’s low
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