Almost every member of Mixed modern family improved last week with Russell 2000 (IWM), Transportation (IYT), Semiconductors (SMH) and Retail (XRT) all posting golden crosses on their daily charts.
Except for regional banks (KRE).
Risk on or off this data-heavy week? Clearly, the performance of Trend Strength Indicator (TSI) from MarketGauge improve across all 4 important indiceswith small caps (IWM) and the Dow (DIA) leading the bundle points to continue risking. However, there are a few areas that should keep investors on their toes.
The 52 week New High / New Low The ratio for the Nasdaq Composite has indeed deteriorated, a clear indication of near-term risk-off. And despite the improvement in the market, the yield curve actually further inverted.
KRE did not have a gold cross (the 50-dma clearly above the 200-DMA). It sits on the 50-DMA, right. Nonetheless, looking a little at the weekly chart, KRE has yet to break through resistance and is far behind the rest of the family. We’ve seen this before. The dynamics of KRE according to our real motion display shows a bullish cross from last November. Since then, however, the price has only lost momentum.
Another member of the Economic Modern family, Transportation, is also warning on the weekly chart.
Note that IYT failed to clear the 50-week moving average (blue line). Also note that the slope of the 50-WMA is negative.
IYT is starting to undercut the SPY and momentum is slipping lower according to Real Motion. Also interesting to note is that the momentum moving averages had a death cross in early November.
Transport and regional banks make up almost 1/3 of the Economic Modern Family.
Of course the week is young so we have time to see if both sectors are catching up or send us a meaningful alert. In any case, they cannot be overlooked.
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Kristin and Mish discuss whether or not the market has run out of good news in this appearance on Cheddar TV.
Harry Melandri and Mish discuss inflation, the Federal Reserve and any spark plugs that might ignite on Real Seeing.
Jon and Mish discuss how the market (still range bound) is betting on a dovish Fed in this appearance on BNN Bloomberg.
Mish discusses the price and what indices need to do now in this gig Make money with Charles Payne.
In this appearance on TheStreet.comMish and JD Durkin discuss the latest market earnings, data, inflation, the Fed and where to put your money.
In this appearance on CMC Markets, Mish delves into her favorite commodities trades for the week and gives her technical take on trading opportunities for gold, oil, copper, silver and sugar.
- S&P 500 (SPY): Resistance met and price declined around 390-400 to hold.
- Russell 2000 (IWM): Even more concerning as we had a high glass ceiling. Could call for a visit to 177 if Fri highs can’t be breached.
- Dow (DIA): A gentler correction that bodes well for industrials since December.
- Nasdaq (QQQ): Like IWM up a glass ceiling. 280 not crazy to see.
- Regional Banks (KRE): Keep watching to see if 60 then holds 57.
- Semiconductor (SMH): Like IWM, QQQ could see a 5-10% decline from here.
- Transport (IYT): Most obvious failure of the 50-week MA.
- Biotechnology (IBB): Multiple timeframes count and this has not passed the 23-month MA so far.
- Retail (XRT): This sector has held up better – if Oma’s brothers fall, XRT can return to 64.
Misch Schneider
MarketGauge.com
Director of Trade Research and Education
Misch Schneider serves as director of trading education at MarketGauge.com. For nearly 20 years, MarketGauge.com has provided financial information and training to thousands of individuals as well as major financial institutions and publications such as Barron’s, Fidelity, ILX Systems, Thomson Reuters and Bank of America. In 2017, MarketWatch, owned by Dow Jones, named Mish one of the top 50 financial professionals to follow on Twitter. In 2018, Mish was the winner of Top Stock Pick of the year for RealVision.
