If A Man Could Have Half His Wishes, He Would Double His Troubles

February 19, 2014

Mish's Daily

By Mish Schneider

Quote: Benjamin Franklin

Goodness, be careful what you wish for right? I wished for drama. Thanks, I think!

Earlier this week we talked about tops. We mentioned that tops are as dramatic as bottoms. They need volume for starters. Then, they have to have some other technical pattern. Most importantly is that they confirm with a second day pattern.

SPY could have put in a double top with 2013 high 184.94, Wednesday’s session high 184.95. The Dow (DIA) went back into an unconfirmed warning phase (as did the Financial sector XLF).

NASDAQ possibly posted a reversal candle. All of the aforementioned instruments had distribution days in volume (when the volume is greater than the day prior and the closing price is negative). However, the volume was decent, not dizzying.

Henceforth, we need to see confirmation Thursday and with increasing volatility. The price pattern right here is sort of in no man’s land-would not necessarily go gang busters short and yet, if the market continues to correct, buy opportunities are premature.

S&P 500 (SPY) If this was a double top, confirmation will look like a trip below 181. Otherwise, we can say that all it did was work off overbought conditions.

Russell 2000 (IWM) Never got to the top of the February calendar range and now, its 50 DMA is 113.27 to hold

Dow (DIA) Could be just a correction to 159 or could be the start of a bigger correction. Unless it clears back over the 50 DMA and closes there.

Nasdaq (QQQ) Maybe brick wall high-maybe

XLF (Financials) Unconfirmed warning phase.

SMH (Semiconductors) In its own world, more paused at this point near the highs

IYT (Transportation) Confirmed warning phase, first to sell off on Tuesday and looking heavy again

IBB (Biotechnology) Possible reversal pattern if continues south from here

XRT (Retail) Confirmed phase change to warning-improvement

XHB (Homebuilders) Inside day and a good one to watch to defend the 50 DMA possibly

GLD Needed to see overbought conditions alleviated which is far as we are willing to say for now unless it really fails from these levels

USO (US Oil Fund) Overbought

OIH (Oil Services) 48.00 resistance

XOP (Oil and Gas Exploration) Inside day-good place to look

TBT (Ultrashort Lehman 20+ Year Treasuries) Through 72.05 wouldn’t fight it

PHO (Power Shares Water Resources) New highs then reversed

UUP (Dollar Bull) 21.60 an area to watch

FXI (China Large Cap Fund) 36.40 point to clear

TAN (Guggenheim Solar Energy) Possible topping candle

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