Market Analysis for Trading on 8/13/2014

Mish Schneider | August 12, 2014

I do see the possibility that the rates have bottomed. Maybe this isn’t the exact tick of the bottom, but the breadth or strength of the move in TLTs is waning.

Therefore, one has to keep thoughts on the fallout and the pearls if rates firm from here. The market is expecting that to happen and lately, firmer rates act as a boost of confidence to the overall market. Yet, that doesn’t mean we won’t see lower prices. The cycle of phases indicates more deterioration likely, but let the market tell you when. More plausible right now is a range bound market, at least for the rest of this month.

We also know similar to the cycle of phases, sectors go through a rotation as well. I have written before about where I keep my eyes when I see the prospect of firmer rates-Financials, Regional Banks, certain Retail chains that benefit from stronger dollar and rates such as Wal-Mart, and countries such as China and Mexico.

As I am heading out on vacation for the rest of the month, returning September 2nd, I pass the baton to Geoff Bysshe, President of Marketgauge.

I wish you all a wonderful and profitable rest of the summer. See you September 2nd!

S&P 500 (SPY) Sitting on the 10 DMA in a warning phase which could accelerate if the market continues to drag. Over Tuesday’s highs would be a decent rescue Subscribers: Negative Pivots in all

Russell 2000 (IWM) Under the 200 DMA but not out of the woods. If it can clear 113.75 so much better

Dow (DIA) Over 165.85 better but under 165 see the 200 DMA again

Nasdaq (QQQ) Doji day and remains in the bullish phase making a lot of the other indices looking more like noise.

XLF (Financials) Good place to look if holds today’s lows

KRE (Regional Banks) Look here and you wonder where the bulls are?

SMH (Semiconductors) This really has to take some leadership and clear the 50 DMA

IYT (Transportation) Similar to SMH

IBB (Biotechnology) Back to unconfirmed warning phase

XRT (Retail) Back below the 50 DMA but on the 200 DMA

IYR (Real Estate) Inside day

GLD I still see this as a negative in the intermediate term, especially given the rate commentary

Metals and Mining (XME) Digestion day

USO (US Oil Fund) Unconfirmed Distribution phase-dancing on the 200 DMA-keep watching

TAN (Guggenheim Solar Energy) Subscribers: Why we waited to get long

TBT (Ultrashort Lehman 20+ Year Treasuries) I like the TBTs here especially if hold today’s low and clear 58.50

EWW (Mexico) Subscribers: Big move

FXI (China Large Cap Fund) Subscribers: Back on track for new highs and around 43 target

CORN (Corn) Subscribers: Possible reversal candle today and time for another long probe if holds around 25.75

Bye for Now!