Market Analysis for Trading on 6/13/2014

Mish Schneider | June 12, 2014

Wednesday night, I wrote about IBM the Dow and how while IBM was breaking a key moving average, the Dow climbed to new highs yet looked somewhat precarious as of the close. The advice, in case there was something to that, was to watch NASDAQ going into Thursday. I even further suggested that the breakaway gap ended in SPY on Wednesday as well.

Now, let’s examine another rarity and possible polarizing relationship-Friday the 13th and the full moon occurring simultaneously. Last time that happened was October 13th, 2000. If you look at the monthly chart, there was a long tail on the monthly candle as the price began with a hard fall, then rallied back to close higher than September 2000. But, thereafter, after a couple of fits and starts, the market did indeed rollover, dropping nearly 25% until a climactic low occurred duringOctober 2003.

Scary? Not one iota of information substantiates the relationship as fact. However, market dynamics dictated by human psychology-another story. Who needs facts when you have people “behaving” out of fear or anxiety?

One thing is for certain, low volume selloffs just as low volume rallies may not be the most reliable indicator to follow. Markets generally need volume/power to sustain a move. However, the market can surely go south because of a lack of buying as well once whatever meager buying has dried up.

With market uncertainty, the last 2 trading days have definitely put a bullet hole in the bull.

Next date for the full moon and Friday the 13th to occur is August 13th 2049. We get through whatever is in store for us now, then we can all howl at the moon for the next 35 years.

S&P 500 (SPY) Although the gap from May 27th is still there, today a lot of damage officially stops the count of days over the breakaway gap and now, we look at 193.50 as a 50% retracement to hold or not Subscribers: Negative Pivots in all

Russell 2000 (IWM) Actually held up the bet so a move over 115.91 will look better and under 114.30 not so much

Dow (DIA) No more gaps here and a reason to support more correction here

Nasdaq (QQQ) Marginally holding the 10 DMA if can stay here-otherwise, damage done

XLF (Financials) Tested that level of support at 22.50-lets see if it holds

KRE (Regional Banks) gradual correction which is encouraging

SMH (Semiconductors) Emerald City still with no wicked witch in sight

IYT (Transportation) That’s a breakdown and suggests selling into rallies

IBB (Biotechnology) Over 250 next stop around 270

XRT (Retail) Hasn’t had the same muster as some of the other groups so could be a drag if cannot hold around 84

IYR (Real Estate) Fairly significant correction unless it clears back over 71.90

ITB (US Home Construction) Not pretty

GLD 123.07 resistance which if clears looks like it will follow SLV which took out the 50 DMA

USO (US Oil Fund) Iraq giving this a big push which is not overall good for the market

XLE (Energy) Possible topping candle if confirms

FCG (First Trust ISE Reserve NatGas) New 2014 highs

TAN (Guggenheim Solar Energy) Busted out of 7 days of compression

TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs Back over the 50 DMA-been a tough game trading rates-I gave up a while back

PHO (Power Shares Water Resources) 27.23 2014 high

UUP (Dollar Bull) War drum affected this from clearing the 200 DMA

CORN (Corn) Subscribers: Back where we originally got long so will keep an eye on it-possible brick wall

JO (Coffee) Subscribers: Could be interesting over 34.00 for a starter position

Bye for Now!