Stock Indexes Confirm Warning Phase Ahead of Debt Ceiling News

July 28, 2011

Mish's Daily

By Mish Schneider


SPY Confirmed in a Warning Phase. With a declining slope on the 50 DMA means it is a strong warning.  129.63 the low from 7/18, still a support area. Telling was that none of the indexes were able to get above R1 today. Now, the number tomorrow is 131.32 should the news from Washington bring us relief. Otherwise, below 129.63, next support at 129.13.

QQQ Held up better along with many of the leaders. Still has a positive sloping 50 DMA which is still quite a distance from the current price.

IWM Holding the 200 DMA even though it closed weak. The hammer candle most likely means that the way IWM breaks from here is good to follow. Under the 200 DMA at 79.51 not very healthy but over 81, could be new life.

ETFs:

GLD- held the fast moving average at 156.30 so trend very much intact. Provided it holds today's low, could be ready to resume move. Under todays low, could see a move to 154.

SLV After the Bearish Engulfing Pattern, had follow through to the downside.   Sloppy chart pattern on daily, not surprising given the uncertainty about next direction.

XLE ChartXLE**Held the support 77.09 with today's low 77.07. Hammer candle close. Over 77.92 looks better. Under today's low and could see test of the 50 DMA at 75.10. Bullish trend still intact.

OIH inside day. Under 158 could see a dip to 155.50 area. Otherwise, above today's high still looking for a move to 166.

IYT 200 DMA at 93.20. Inside day and still oversold on the 2-day RSI. Above today's high could be a key reversal. Otherwise, the 200 DMA is looming.

IYR 60 good support especially since also oversold on 2-Day RSI. 61.00 first area to get back through.  63 for now, double top.

SMH Broke the 50 weekly moving average. Big area to watch for either a move above or now resistance.

FXI **if holds 41.90, would consider buying again with a risk to under 41.77 the 200 weekly moving average

XLF Over 15.00 back in business. Otherwise, 14.45 recent low and support

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