Stocks Trading Higher on Earnings and Possible Government Sanity

July 19, 2011

Mish's Daily

By Mish Schneider

SPY not only did what it needed to do, surpassed what it needed to do. Once it opened up above 131.45, it was a "follow it up" with barely a moment of pain. Now, has some resistance at 133.25, initial support at 132.30 and then at today's low 131.31 which seems unlikely to see at least in the next couple of days. Still working off the island top which appears only on the daily not the weekly chart. Next overhead resistance at 137.25. Eminis have to get back above 1328 level.

QQQ today's low was just above the 10 day moving average. Now, we should see 60 as some initial resistance, but the overall chart formation suggests the possibility of a move to 65. 58.60 intraday support, better at today's low.

IWM 83.48 is the 10 day moving average, the next point that needs to cross. After that, could very well take another shot up at the all time high 86.82.

I've been writing that the long-term trend has not been violated since the bullish run began last summer. Of course the volatile swings have kept most traders in and out of their positions as I cannot imagine the level of tenacity it requires to be a buy and hold investor. Plus, there has been a plethora of incredible opportunities to catch momentum, take profits and look again with fresh eyes. Now, it is entirely possible that we will see another big swing to the upside. Volume was light all around, but I take that more as an indication that many investors are still aside unbelieving then as a sign of a weak rally.

Featured ETFS:

SLV and GLD as noted yesterday, used a trailing stop and exited GLD at 156 from the long position established at 148.50. SLV exited the long position from 37.85 at 39. Both still have long-term bullish trends, but will now wait to see if GLD can retrace back down to 152.50.

EWC*broke above 32.00 on a closing basis, the trendline on the daily chart. Should hold above the trendline with the next resistance at 33.20.

XRT Now expect a move to 56 with support at 54.32

IBB did not perform as well as some of the other sectors stopping right by 10 day moving average at 108.02. Provided it continues to hold 106.50, now if it gets above the 10 day moving average, next time it gets to 110, will continue onto new highs with a projected move of 115.

SMH ChartSMH held the 50 weekly moving average and ran right up to 200 daily moving average. Since this hasn't violated its long-term bullish trend, provided it now holds above 32.60, if it clears the 200 day moving average can rally up to 34.

OIH overall target 166. Would continue to be a buyer of dips.

XLE now see a possible move up to 81.

XLF reversed the recent downtrend. Now, provided it continues to hold 14.60, could see a rally up to 15.25.

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