What's Oversold? $SPY $QQQ $IWM

April 9, 2012

Mish's Daily

By Mish Schneider


By the time S&P 500 (SPY) gets to the major support at the 50 Day Moving Average, it will be sufficiently oversold. Unless it breaks the 50 DMA for a couple of days and the slope of that moving average turns negative, it will be oversold in its current bullish phase. Even though the reversal candles at the recent highs have sufficient follow-through to satisfy bears, I would rather be looking for buy opportunities following the intact overall trend.  Furthermore, the leading stocks (BIDU AAPL in particular) remain strong. One must note however, that the DOW (DIA) is in an unconfirmed weak warning phase and Russell 2000 (IWM) is in a confirmed warning phase. Tomorrow begins earnings season with Alcoa first up.

S&P 500 (SPY) Aside until we see digestion or a test and hold of the 50 DMA

NASDAQ 100 (QQQ) Still looks heavy from the recent double tops, but also holding key support areas.

ETFS:

XLF (Financials) 15.00 pretty big number with oversold conditions on daily relative strength indexes

IBB (Biotechnology) Been a leading sector that has room to the 50 DMA and not yet oversold.

SMH (Semiconductors) Back above 34.70 would be encouraging but now under the 50 DMA

XRT (Retail) Like to see this test and hold the 50 DMA and show oversold daily indicators to boot

IYT (Transportation) Interestingly, last week's low held at 92.09 for now

IYR (Real Estate) If the positive monthly trend holds on, that will sure help the overall market

OIH (Oil Services) Approaching oversold with yet another hammer candle

TBT (Ultrashort Lehman 20+ Year Treasuries) Hard to believe rates can go lower, but with the ugly gap down, the 50 DMA now resistance.

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