Market Analysis for Trading on 4/11/2014

Mish Schneider | April 10, 2014

One nagging thought that just won’t go away is about the relationship between interest rates, the initial purpose of quantitative easing and where the market sits today.

The Federal Reserve switched to a policy of tapering last fall, which seemed so right. However, the clarity that they had when they first announced Operation Twist in 2011, then the QEs, followed by the taper appeared spot on to me. Now, not that I have any real right to criticize other than exercising my freedom of speech, I believe the FED has lost its way.

Thursday was the biggest drawdown in NASDAQ since 2011. Rates dropped again. Everything in me now says these low rates are the bubble ready to burst. Timing is everything of course-

S&P 500 (SPY) And to add insult to injury, volume was strong. Unconfirmed warning phase Subscribers: Negative Pivots in all

Russell 2000 (IWM) After failing to take out the 50 DMA Wednesday on a day when the Dow flew, here was the writing on the wall. Now, rallies should be meeker but what one should wait for end of week before another week filled with religious holidays

Dow (DIA) Unconfirmed warning phase

Nasdaq (QQQ) Sort of held Monday’s low so won’t be surprised to see Friday put in an inside day.

XLF (Financials) Under the 50 DMA again-now oversold

SMH (Semiconductors) Always the place to look should there be any buying left

IYT (Transportation) Barely holding that 50 DMA now

IBB (Biotechnology) tested and held the 200 DMA-another strong candidate for an inside day-but that doesn’t mean strength

XRT (Retail) Under the 200 DMA now

IYR (Real Estate) Still above the 50 DMA-another one to watch for any strength

GLD Unconfirmed bull phase but with lots of overhead resistance

USO (US Oil Fund) Inside day-good sign

TBT (Ultrashort Lehman 20+ Year Treasuries) Subscribers: What we will watch for in TBTs-a slingshot low with good volume or, a cross of the 10 DMA

EEM (Emerging Markets) Inside day

FXI (China Large Cap Fund) Subscribers: Maybe a slingshot high-has to confirm

CORN (Corn) Subscribers: Did not confirm a slingshot high which is a good thing for our long

FCG (First Trust ISE Reserve NatGas) Held up better but wouldn’t rush in

SGG (Sugar) Subscribers: 57.75 the 200 DMA to watch for a cross-will be watching this carefully

Bye for Now!