Market Analysis for Trading on 10/1/2013

Mish Schneider | September 30, 2013

Existing Position: Long EWG 28.02

Current Price: 27.83

Sell Stop: 27.39

First target 28.99


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Existing Position: X Long 20.68

Current Price: 20.63

Stop Loss: 19.67

First Target: 21.93 Take 1/3 to 1/2

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Existing Position: Long: IYR 62.15 ¼-1/3 position left

Current Price: 63.77

Stop Loss: 63.49

Next target: 66.59 sell another piece to leave ¼ of orig pos on

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Out-Existing Position: Long OIH $45.47 (1/4 position)

Stopped OUT: 46.69

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Existing Position: Long TXN $39.18 ½-2/3 left

Current Price: 40.27

Stop: 39.18

First Target: REACHED! 40.59 Sold 1/3-1/2

Next Target: 42.91 for another ½ of the balance

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Monday brought an unconfirmed warning phase to the S&P 500 with a distribution day in volume and a confirmed warning phase to the Dow. NASDAQ closed basically unchanged while thesmall caps closed higher with an accumulation in volume. Biggest loser percentagewise-Real Estate Sector ETF. Biggest gainer-XHB Homebuilders. Second to that-Semiconductors. The talk of an island top has been silenced-gaps filled. Our portfolio shows more than a 27% gain since June 2013 but with the least number of positions on currently since before my vacation in August. We are light and ready to move to whatever tune the market has in store as October hits-from the waltz to break dancing. Please read below on thoughts as the best dance partners.

S&P 500 (SPY) Watch the 50 DMA-the unconfirmed warning phase is just that unconfirmed and weak at that. Subscribers: Negative pivots in all indices

Russell 2000 (IWM) Closed just shy of the 10 DMA which means over Mondays highs-should probably close your eyes and follow the leader

Dow (DIA) First has to clear 151.76 then the 50 DMA so definitely has its work cut out for it

Nasdaq (QQQ) Closed just shy of the 10 DMA which means over Mondays highs-should probably close your eyes and follow this leader as well

ETFs:  

XLF (Financials) Clearly a wallflower here and probably needs to stay that way for now

SMH (Semiconductors) No more breakaway gap. Let’s see if this can clear 40.20

XRT (Retail) Another viable dance partner over today’s highs

IYT (Transportation) Went right to the 50 DMA and bounced-not seeing a clear path just yet

IBB (Biotechnology) Has to clear the recent highs

IYR (Real Estate) Certainly not a good dance partner just yet

GLD To me, today’s action is negative. Unless it clears 129, looking like it can drop back down to July levels 

USO (US Oil Fund) Landed right on the 200 weekly moving average-which if holds todays’ low could mean a pop from here.

XOP (Oil and Gas Exploration) Another potential dance partner over today’s highs

VXX Subscribers: only 1/3 position left now to play out

EWG (Germany) Subscribers: Over 27.90 should continue after the runaway gap from 9/16

FXI (China) Subscribers: Unconfirmed phase change to recovery unless the 200 DMA and today’s high clears

SGG (Sugar) Subscribers: One more push gets this over the 200 DMA

Bye for Now!