Market Analysis for Trading on 11/25/2013

Mish Schneider | November 24, 2013

Exisitng Position: FCG Long 19.61

Name of Instrument: First Trust ISE Reserve Natural Gas

Sell Stop: 18.67

Current Price: 20.02

First Target:  20.77 for 1/3 to ½

Reason For Trade: Clearing the 50 DMA for phase change. Over the 200 weekly and 23 monthly moving averages. Possible move near 24.00 makes risk/reward good



Existing Position:  Long IGT 17.96

Name of Instrument: International Game Technology

Current Price: 16.97

Sell Stop: 16.24

First Target: 19.24 for ½ off


Existing Position: Long FITB 19.10

Name of Instrument: Fifth Third Bancorp

Current Price: 20.58

Raised: Sell Stop: 18.99

First Target: 20.97


Existing Position: Long XHB 30.70

Name of Instrument: SPDR S&P Homebuilders

Current Price: 31.37

**Revised Sell Stop: 30.44 (Have 2 ATRs now)

First Target: 32.49 Sell ¼-1/3


Existing Position: Long TEX
: 35.00

Current Price: 35.57

Name of Instrument: Terex Corp

Sell Stop: 33.14

First Target: 37.09 Sell ¼-1/3


Existing Position: Long XRT 82.78 ¼ position remaining

Current Price: 87.29

Profitable Trailing Stop: 85.47

First Target: 85.77 for ½

REACHED **Second Target: 87.49 sold another ½ of remaining balance


As we seasoned traders watched the substantial boost to our portfolios last week, an article in the newspaper got my attention. The headline: U.S. Life Expectancy Ranks 26 in the World.One reason cited for this statistic is that *Americans go to the doctor on average four times a year while the International average is six times a year. In other words, we’re great at checking for problems, but less great at following through with treatment.” This got me thinking aboutvolume and the stock market. Last Thursday and Friday everyone heard/read/saw that the market broke 16,000. The volume, however on both days, was considerably less than the daily average (currently 7 million plus shares a day).  The greatest volume in the Dow last week happened November 20th when it dropped considerably from its previous high-reminder-the day of the Federal Reserve minutes. Volume posted 10.2 million shares traded that day.  Stretching the analogy some, the volume showed up when the “health” of the patient (stock market) came into question. Once the patient was “cured”, the volume dried up-or less great at following up with “treatment” if you will. What does this mean going forward? With the market running to new highs, the investors were no longer checking in. This week, the participants will find the excuse of remaining sidelined with the upcoming Thanksgiving holiday. Perhaps the validity of that will be waiting for the initial results of “Black Friday” and retail sales. Going out on a limb, sales should be robust. Keeping in line with historical peaks and valleys, it certainly makes the case for the euphoria to come back in after the Thanksgiving break with one more push on huge or double the average volume, which I suspect if does indeed happen, might be the high tick for the remainder of the year. Of course, this is just an educated guess partially based on the psychology of many “uneducated and amateurish” investors. 
*“We don’t find our doctor visits especially helpful..we’re less likely to think our doctors spent enough time with us or gave an easy-to-understand explanations.”  So many people remain baffled or incredulous as to the recent strength. They do not believe in “the treatment” until they see it as a miracle cure for everything! My hope is that a humongous rush to get some medicine doesn’t put us all in the ER. 
*Sarah Kliff The Washington Post.

S&P 500 (SPY) A rising fast moving average now, 179 becomes pivotal. The price pushed and ended above the weekly Bollinger Bands. Subscribers: Positive Pivots in all.

Russell 2000 (IWM) 113 now likely with 111 area support near term

Dow (DIA) The rising fast moving average here is 158.90. Also cleared the weekly Bollinger Band

Nasdaq (QQQ) 84.11 the actual 2013 high tick from November 18th. Friday high 84.02. 83.25 support to hold

XLF (Financials) It seems the trend is intact for the rest of the year and into 2014-dips should be considered buy opportunities

SMH (Semiconductors) Inside day and compelling to watch since the range is between the fast and the 50 DMA. One way or another this breaks-telling

XRT (Retail) Inside day here too. Keeping with the analogy above, expect could stay in consolidation mode until after Thanksgiving

IYT (Transportation) 127.70 support and 129.63 the 2013 highs

IBB (Biotechnology) “New 2013 highs good for $25-30 over time.” Written last Thursday. On Friday it moved up 7.00 into that projected forecast!

IYR (Real Estate) Over 64.00 much better but still a major concern.

XHB (Homebuilders) 31.00 new area of support to hold

GLD Would rather short closer to the 122 resistance area but if breaks the monthly moving averages, 2013 lows are around the corner

USO (US Oil Fund) Looking for this to fill the gap to 34.60-then reevaluate

OIH (Oil Services) In its own world-not cooperating with the other groups-where to go for a short if market corrects again

XLE (Energy) “Promising to take out 2013 highs”. From last Thursday and it dutifully did on Friday.

XOP (Oil and Gas Exploration) Friday’s lows good support now

TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs confirmed slingshot low. Subscribers: An ORR if holds 103.55 good

FXI (China) Like how last week ended with the gap over the 200 weekly moving average

Bye for Now!