May 7, 2014
By Mish Schneider
As if the divergence could not get any more spectacular on every level-here’s the breakdown:
S&P 500-Bullish Phase Closed Green
Dow-Bullish Phase Closed Green
NASDAQ-Strong Warning Phase Closed Red
Russell 2000-Distribution Phase-Closed Red
3 phases among the 4 indices!
What about the sectors and groups?
Energies, Natural Gas and Oil-Bullish
Semiconductors and Biotechnology: Warning
Real Estate and Transportation: Bullish
Financials: Warning Regional Banks: Distribution
Homebuilders and Retail: Distribution
Silver: Bearish Gold: Distribution
Why do I summarize this? For 2 reasons. First, to specifically illustrate the true nature of a market that has shifted paradigms-little is the same as it ever was.
Secondly, to highlight not only the cross-section, but also the places to look depending upon next overall phase change in the indices-will we sell the mighty or buy the meek? Will we continue to buy the strong and sell the weak? Only the most experienced and flexible traders should know what to do now.
One shift I see with almost 100% confidence-rates-that blow off top in TLTs-still very much in the works.
S&P 500 (SPY) Tested and held the 50 DMA and just about cleared the 10 DMA
Russell 2000 (IWM) Possible new reversal candle which would really bring relief in a big way of clears the 200 DMA and holds-and with good volume
Dow (DIA) Tested and held the 50 DMA and cleared the 10 DMA. All these points have to hold
Nasdaq (QQQ) Until this clears the 50 DMA this just is noise
XLF (Financials) Sloppy chart but good comeback
SMH (Semiconductors) 44.80 is where I would like to see clear
IYT (Transportation) Has some overhead, but in good shape comparatively.
IBB (Biotechnology) Look here for a pop over 231. Or poop under 222.84
XRT (Retail) This low has to hold or a real thorn in the side of the market
IYR (Real Estate) New highs-whoo hoo!
GLD As I suspected-weak and should get a whole lot weaker
USO (US Oil Fund) Unconfirmed phase change to bullish
OIH (Oil Services) Near the highs
XLE (Energy) New highs again
XOP (Oil and Gas Exploration) holding near the highs
TBT (Ultrashort Lehman 20+ Year Treasuries) I know I have been looking for a bottom for some time-64.00 has to clear
KRE (Regional Banks) Possible reversal candle
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