Market Analysis for Trading on 5/21/2014

Mish Schneider | May 20, 2014

The small caps look terminal but, they are holding the key point of reversal from May 15th and if Tuesday typifies the 2014 action, Wednesday, we might see an up day-even possibly a move to the 200 DMA and beyond.

And that’s exactly the nutty contrarian talk that lately does not sound so nutty.

NASDAQ held the 50 DMA. I will bet against the small caps, but not here; therefore, I prefer to walk the middle ground-take positions long or short with a wide stop as instruments set up. Furthermore, resist the temptation to buy strength and sell weakness.

Wednesday FED minutes will take center stage. And we all know how calming FED speak has been lately. TLTs still above the fast moving average and of course, still have eyes peeled there.

S&P 500 (SPY) 186.50 the absolute line in the sand. Subscribers: Negative Pivots in all

Russell 2000 (IWM) Besides the perma bears, who doesn’t want to see this take out and hold 111.35? 108.09 good point to hold

Dow (DIA) Unconfirmed warning phase unless it clears back over 163.78 the 50 DMA

Nasdaq (QQQ) A hold and close above 88.61 will be a first since early April. Otherwise, 87.40 big area of support to hold

XLF (Financials) Still a bit far from the 50 DMA and closer to support

SMH (Semiconductors) Has to clear 45.03 and really hold around today’s lows

IYT (Transportation) Digestions and still looks ok

IBB (Biotechnology) Inside day

XRT (Retail) A huge thorn in the side of the market-81.46 must hold

IYR (Real Estate) Maybe running out of energy-and time for a correction

GLD still just chopping around sideways near all the moving averages so keep looking

USO (US Oil Fund) If this can fill the gap to 37.55 and continue looks really good

TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs 112.35 the fast moving average

UUP (Dollar Bull) Bottoming action still in play with 21.50 the elusive resistance

Bye for Now!