Market Analysis for Trading on 10/24/2013

Mish Schneider | October 23, 2013

New Trade: Long SLV 21.82

Name of Instrument: iShares Silver Trust

Current Price: 21.76

Stop Loss: 20.93

First Target: Take ½ 23.49

Reason for Trade: Crossed the 50 DMA for a phase change to recovery. If stays strong, will also clear the 80 monthly moving average

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Existing Position: Long XRT 82.78

Current Price: 83.41

Stop Loss: 80.44

First Target: 86.49 for 1/2

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Existing Position: Long EEM 42.85

Current Price: 42.66

Stop loss: 41.19

First Target: 45.49 for 1/2

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Existing Position: Long: FXI 37.31

Current Price: 36.90

LOWERED**Stop Loss: 36.17

First Target: 38.97 take off 1/3 to 1/2

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Existing Position: Long EWG 28.02 Sold 1/3 to ½ 29.33

Current Price: 29.41

New Stop-Breakeven: 28.02

Next Target: 44.87


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Existing Position: X Long 20.68 ¼-1/3 Position Remaining

Current Price: 22.91

**Next Target for Exit Before Earnings October 29th: 26.19

RAISED**Profitable Trailing Stop For Balance: 22.37

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Although it looked like tough going early on, the small caps (Russell 2000s) held the runaway gap and closed well enough to negate the topping candle. NASDAQ same story. Nor do I see anything terribly alarming in the Dow or S&P 500 based on Wednesday’s action. Therefore, let’s call Wednesday a digestion day near the new 2013 highs. The big surprise came out of China and the Emerging Markets, both of which (ETFs) had selloffs on decent volume-liquidation.Semiconductors and Oil and Gas Exploration, both of which had been looking so positive, also sold off hard, beginning with the gap lower. The morals of this story are: 1. Buy and hold can be costly 2. The bigger they are the harder they fall 3. Take profits when prices become extended 4.Pay attention to relative strength and overbought indicators 5. Don’t pay up when the clear cut risk is too far away. 6. Don’t fret on missing any boats-what is great about the market is each day a new boat sails if you know where to look.

S&P 500 (SPY) Friday’s gap low-holding nearly a week-Thursday should prove if that will remain a fact. Subscribers: Negative pivots in all indices

Russell 2000 (IWM) 109.83 is last Friday’s low. Although the market remains strong, a break and close below that level-fair warning.

Dow (DIA) 152.95 is the fast moving average support to hold

Nasdaq (QQQ) 81.35 the breakaway gap low

XLF (Financials) Looking toppy unless it clears back above 20.88

SMH (Semiconductors) Hard to believe in one fell swoop looking at the 50 DMA

XRT (Retail) Need to hold today’s low and try to climb its way back to negate a topping looking candle

IYT (Transportation) Inside day near the new highs. Overbought, but can’t argue with the strength

IBB (Biotechnology) Has to clear last week’s high

IYR (Real Estate) A gap over the 200 DMA would be interesting. Inside day.

XHB (Homebuilders) Subscribers: Took a small profit and holding on as long as the moving averages hold

GLD 129.65 is the 50 DMA. Inside day Subscribers: SLV Crossed the 50 DMA confirming the recovery phase with an inside day

USO (US Oil Fund) Broke the 200 DMA and now oversold

OIH (Oil Services) Why buying new highs can be ever so scary

XOP (Oil and Gas Exploration) Confirmed topping action, especially if cannot recover by the end of the week.

UUP (Dollar Bull) 21.33 now low two days in a row

VXX Subscribers: 12.90 should be support or it was a quick hedge that we no longer need

FXI (China) Unconfirmed distribution phase and oversold

Bye for Now!