Market Analysis for Trading on 6/6/2013

Mish Schneider | June 6, 2013

Note: Again, reluctant to recommend new longs and now overall market oversold so harder to look for a swing short. Patience will pay off I promise!

Open Trade Update

Existing Position: OIH long ½ Position

Current Price: 42.96

Stop:  42.67 (Balance)

Target: 50.00-53.00


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

Current Price: 38.06

Stop:  35.79

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


Existing Position: XLF 1/4 position left from 18.38 entry

Current Price: 19.37

Stop: 18.77

First Target: Met and now have 8 ATRs
Second Target: Met at 20.00 -have ¼ position left


Storm clouds forming now in Northern New Mexico. A thunderstorm in this case would be a welcomed relief to the fires that have been raging. Perhaps the now oversold conditions on the McClellan Oscillators will provide some welcomed relief for the fire raging in the Dow. However, with a drought of good economic numbers lately, significant issues in Japan and a very quiet Federal Reserve Chairman, like the summers in New Mexico, would anticipate more not less flare ups going forward.
I look for reversal patterns (like the one we wrote about on May 22nd from the highs). There are several patterns that qualify. That’s what we are waiting for.

S&P 500 (SPY) Broke 162.66 and the 50 DMA is in viewing distance.  Today held the low of the runaway gap-maybe that’s the relief for now-maybe Subscribers: Negative Pivots in all indexes

Russell 2000 (IWM) Closed under the 96.50 level but marginally, which means if there is any chance of a rally, even if it’s short-lived, a move back over this level would be one sign. Otherwise, the 50 DMA is next.

Dow (DIA) Similar to SPY, close to the 50 DMA-real close.

NASDAQ 100 (QQQ) 71.91 is the gap low the day we saw the beginning of the runaway gap. But, 71.00 is the 50 DMA and return to the channel breakout area. 


GLD 137 resistance and 134 support with a nearly impossible read on the technicals other than the bear phase. I will say that a close up only slightly makes me think this is still quite vulnerable.

XLF (Financials) Failed 19.50. Now pivotal to cross or the 50 DMA is next

IBB (Biotechnology) Why the 50 DMA is not always the line in the sand, even if it’s the first time it’s been under in 2013.

SMH (Semiconductors) Well, we prepped for the possible reversal Tuesday afternoon by selling our INTC long early today. Now, 38.00 is not as important as the monthly chart channel that cleared last month after 12 years of basing action.

XRT (Retail) It seems that this sector is a real key to how the market does at the end of this quarter into the next one. Right now, heavy

IYT (Transportation) More proof that the 50 DMA can be a wall of support or a barrier. Really close to some support levels. For now, momentum is down so no reason to rush in.

IYR (Real Estate) Held the 200 DMA and the very first place we will look for a reversal pattern to go long. Subscribers: Stay tuned for videos and tweets about what that will look like

USO (US Oil Fund) 33.60 is key resistance which if clears is technically a reason to think buy.

OIH (Oil Services) Right on the 50 DMA and under the runaway gap low.

TBT (Ultrashort Lehman 20+ Year Treasuries) The reversal candle from 5/31 has now confirmed. 66.00 is last area of support to watch for.

XHB (Homebuilders) Confirmed warning phase.

UUP (Dollar Bull) Subscribers: A move through 22.55 will get me long again.