Market Analysis for Trading on 5/20/2013

Mish Schneider | May 19, 2013

Open Trade Update

Existing Position: OIH 44.44 (1/2 of your normal position size)

Position: Long

Current Price: 44.97

Stop:  42.24

Target: 53.00-55.00

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Existing Position: SMH Long 35.02 (1/4 position left)

Current Price: 38.77

Stop:  ¼ position left stop 35.79 (raised)

Target: Holding ¼ position longer term-no specified target yet

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Existing Position: XLF ½ position

Current Price: 19.95

Stop: 18.49 (raised)

First Target: Met and now have 8 ATRs
Second Target: 20.00 (Take ¼ more of position off)

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Market Analysis for Trading on 5/20/2013

It didn’t take long to get the answers to our questions concerning how well the market would take a round of lukewarm economic data or whether or not the US dollar would correct and rates rise. Friday made yet another dizzying move to the upside, with a record high close. Are there any skeptics left? Indeed. I find that exciting. When I traded on the NY Commodities Exchange back in the day, we had an expression: When your taxi driver tells you, “I just bought stocks; market going higher,” the top is near. Since I do not live in NY anymore, I never take taxis. Maybe that’s for the best! The top will be obvious when it’s obvious and not before.

S&P 500 (SPY) After last Thursday’s inside day, this plowed through the weekly Bollinger Band resistance. Last vestige of chart data to base anything on gone. Unless, it comes back beneath it.  Subscribers: Positive pivots in all indexes

Russell 2000 (IWM) Inside day Thursday, new highs Friday. Again, uncharted territory.

Dow (DIA) 153 is the weekly Bollinger Band-perhaps the only tangible number we can see going into Monday

NASDAQ 100 (QQQ) When I write about possible reversal patterns as I did last Thursday (New highs, closed on the intraday low), that is meant as a head’s up. However, every technical signal needs another day of confirmation. I rest my case.

ETFs:  

GLD So oversold now close to the 130.51 2013 low.

XLF (Financials) The financials told the story when a major trend reversal first happened on the weekly chart mid-2012, then again this month when it cleared the monthly moving average.  19.38 is key

IBB (Biotechnology) Ended the week with a meek inside day holding the fast moving average and not clearing the weekly Bollinger Band. But, has had an incredible rally for 2 years!

SMH (Semiconductors) Inside day so has to begin next week clearing 38.87 to continue north.

XRT (Retail) After last Thursday’s nasty bearish engulfing pattern-it ended the week with an inside day. Therefore the range break from last Thursday is a big clue here one way or another.

IYT (Transportation) Strong with next target 120 if holds 116

IYR (Real Estate) Been a leader all year

USO (US Oil Fund) Confirmed accumulation phase

OIH (Oil Services) 45.12 is the 2013 high looking less elusive for this week

XLE (Energy) Took out 81.00 last week and ended on new highs

TBT (Ultrashort Lehman 20+ Year Treasuries)  Turned out the return to the converging moving averages last Thursday was an incredible buy opportunity. The FED giving up on easing rates makes them look really smart-wow!

XOP (Oil and Gas Exploration) Reversed the lower high pattern of 2013 with a great performance last Friday. This should keep this going since has a lot of catching up to do.  

XHB (Homebuilders) Inside day with support on the 10 DMA.  Needs to clear 32.55. 

UUP (Dollar Bull) Major reversal in the dollar last week.

UNG (United States Natural Gas Fund) Needs to clear the 50 DMA, at 21.97 for a continued move up.

Bye for Now!