Market Analysis for Trading on 5/22/2014

Mish Schneider | May 21, 2014

The market responded well to what sounded like double talk to me. Fed: “We can stimulate to improve the employment number without spiking inflation” The other Fed: “We will begin weighing options to raise rates, pull back stimulus.”

We all know this has been a contrarian market, so cheering about a well-endowed day might be like admiring a fake pair.

NASDAQ managed to close above a 2 month high so that’s a relief especially that it is NASDAQ. The small caps held the critical 108 level yet, requires more muscle to clear the 200 DMA.

S&P 500 cleared 188.79, diminishing the impact of those topping candles and DIA went back into an unconfirmed bullish phase.

Semiconductors cleared the 50 DMA with overhead resistance, while Retail improved however not nearly enough and the Financials inched closer to its 50 DMA.

And what about the rates? The TLTs broke and closed beneath the fast DMA but still not convincingly enough to warrant a short position. Thursday should be more decisive on how the market ultimately interprets the FED’s bafflegab.

S&P 500 (SPY) Calling 188.79 pivotal Subscribers: Positive Pivots in all

Russell 2000 (IWM) Will this take out and hold 111.35? Inside day so fascinating to see which way the range breaks Thursday

Dow (DIA) Unconfirmed bullish phase with the fast moving average over the Wednesday’s highs and the 50 DMA under Wednesday’s lows

Nasdaq (QQQ) 89.41 next resistance and now, 88.60 pivotal

XLF (Financials) Look here and it seems like a rally into resistance unless clears 22.00

SMH (Semiconductors) Has to clear 45.03 and really hold around 44.75

IYT (Transportation) Inside day near the highs making this a big focal point

IBB (Biotechnology) 2 Inside days and a month of compression!

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-which could be a sign for firmer rates

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

USO (US Oil Fund) Will be interesting to see if this can hold 37.55 now

TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs 112.35 the fast moving average-and now pivotal

PHO (Power Shares Water Resources) Inside day

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

EWP (Spain) Subscribers: Like this again over today’s highs with a new risk to under last week’s low

TAN (Guggenheim Solar Energy) Nice looking reversal candle clearing a moving average. Subscribers: An ORR would be good for risk to today’s lows

FCG (First Trust ISE Reserve NatGas) Subscribers: Look for an ORR here too against the 10 DMA

Bye for Now!