November 18, 2013
By Mish Schneider
My husband, Keith Schneider, CEO of Marketgauge and my partner in our hedge fund, typically does not sit in front of computer screens all day like I do. At one point during today’s session, he made a cameo appearance and quietly said, “Vix futures demonstrating market is at irrational exuberance.” “Hmmm,” I thought. “Where can I find other signs of deterioration while the Dow-hello-is making new highs? I know, I will look at the Russell 2000s!” 111.62 is the 2013 high made on October 29th. The next day, it sold off hard, dropping to the 50 DMA over the next several days, finally turning around on November 8th and then rising in price until today when it reached a high of 111.42. Twenty cents shy. That’s where I looked until I saw the TWEET! Carl Icahn-AAPL-Bearish in the market- NASDAQ-reversal from new highs-bye bye-new highs in the small caps, Dow and the S&P 500. Gone in 60 seconds. Of course, all reversal candles, price and chart patterns need second day confirmations. However, the recent action could be self-fulfilling in scaring traders enough to stay sidelined and nouveau bulls to liquidate. We shall see.
S&P 500 (SPY) “Getting overbought here in nosebleed territory. That means digestion/small correction is around the corner.” Words of the prophet. 177.70 the fast moving average to defend
Dow (DIA) Best bet to hold up or go sideways. But if this cannot, not good for the others for sure
Nasdaq (QQQ) When climbing Mt Everest, make sure you don’t look down alright. Ouch. 82.70 was my number last week. Still watching that area to see if it can hold.
XLF (Financials) Still best bet to keep the party rolling
SMH (Semiconductors) At first it looked like a gift since the highs were still a bit from reach. Today, it looks like a possible bearish engulfing pattern, except it these lows hold, not so bad
XRT (Retail) Looking for a confirmation that today was a top for awhile
IBB (Biotechnology) Once again, closest to the 50 DMA but more like a range with October and November lows the bottom and September and October highs the top.
IYR (Real Estate) One of my top four areas to look at and this had a bad day
XHB (Homebuilders) Called for digestion-getting it
GLD 121.85 support or this will head further south
USO (US Oil Fund) This also looks pretty awful
XLE (Energy) If you can’t count on new multiyear highs for much-makes everything under suspicion.
XOP (Oil and Gas Exploration) First to exhibit the nastiness on Monday. 66.00 support
TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs explosive after inside day. Now the 50 DMA is within its reach
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