Now that the markets have made the headlines with the spx making a new all time closing high I am expecting more activity in the markets overall. The low in the VIX was 11 last week and with a new closing high the VIX is above 12. This is something to watch. Also, to put things in perspective while the SPX is approaching the intraday trading high of 2940 the NDX has taken out it old intraday high of 7700 closing at 7810ish – 110 points above. The NDX is overbought using RSI. The SMH is also ob on the RSI and well extended above the 8 day. I am thinking there might be a nice mean reversion trade in the NQ coming. The set up would need to be into strength. If there isn’t a another push I think sellofs should be bought.
IWM – lagging but moving up with the other indexes. A move above and 158.10 area could lead to a test of the 159.5 prior high.
CL and XLE – crude has an inventory number at 10:30. The XLE is still at the 200. The next test would be 70.37 area.
XLF – has been going sideways lately. 27.10 support with 27.46 as res.
SMH- very extended from 8 day OB RSI and at band high. Weakness here could lead to that mean reversion trade in the NQ
XLK – the monster is also very extended – similar to SMH
IBB – XLV bouncing back. XLV res 88 with support 85.29. Its very oversold on daily RSI and expect it to stay bid which would be a plus for the SPX.
LOOK FOR SET UPS AND TAKE POFITS!