June 22, 2011
By Mish Schneider
Beginning again with IWM, there continues to be mixed signals. On the one hand we have the continuing decline of the 50 day moving average, a close beneath the adaptive moving average yet still above yesterday's low ending with an interesting hammer candle. Therefore, although the warning phase continues to accelerate, using 80.20 as pivotal, if this rallies above, there is still the possibility that we could see a move up to test the 50 day moving average. However, a break of 80.01 and we could see a test of the underlying support at 78.90.
SPY once again stopped short of the adaptive moving average also with a declining 50 day moving average. As far as volume patterns go, none of the indexes had any significant pattern; in fact considering it was FED day, lighter than average volume all-around. SPY similar to IWM is above consolidation from last week. Looking at SPY, there is underlying support at 128, and longer-term trend is still positive. I would not be surprised to see choppy, range bound market action for the next couple of days.
QQQ stopped right on the 200 day moving average again today which actually confirmed it back into a warning phase after being in a distribution phase. Therefore, this index might be the most decisive tomorrow either holding above 54.81 and continuing to rally or trading beneath 200 day moving average and retesting the recent levels of support down at 53.60 area.
ETF's: SLV The 50 day moving average is sharply declining, it has been unable to get above the adaptive moving average and today was the first time in a while it closed on a 30 minute opening range failure. Like with the indexes, considering the mixed indicators, near-term negative bias, but trading with flexibility.
GLD had a DOJI day and remains in a strong bullish phase.
XLF got closer to a death cross with the 50 nearing the 200 day moving average. We were unable to get through the last swing high of 15.19 back from June 14.
XRT could not confirm back into a bullish phase closing beneath the 50 day moving average. This would be another good one to watch for direction tomorrow.
The other leading ETF's such as SMH, XLE, OIH and IYR all have equally mixed indicators at this time.
TLT** The overall chart formations still looks like it has potential for a rally.
Finally, EURUSD continues to test the upper end of the range with resistance between 1.44 and 1.45. Clearly, 1.42 has proven itself as good intermediate support.
Today, we exited most long positions and are mainly in cash awaiting clearer signals.
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