Focusing on the Economic Modern Family, the weekly charts will help us see who is doing what, why, and perhaps help us understand for how long.
Granddad and Grandma Russell and Retail are the matriarch and patriarch of the Family. IWM cleared the 50- and 200-week moving averages and is in an accumulation phase. 190 remains an elusive point to clear (the 23-month moving average not seen here is key).
Our Real Motion Indicator shows that IWM is stalling in momentum as it is over the 50-WMA (blue) but well under the 200-WMA (green). It is possible that IWM fails from here at key resistance, dragging the market down too. Or it is also possible that IWM is revving up to clear 190, and momentum will begin to increase.
Such is Gramps.
Grandma Retail is below the key weekly MAs. She seriously needs a push above, which of course would help the Russell. Momentum is also inline, yet testing the 50-WMA. Granny’s activity this week is key.
Sister Semiconductors (SMH) and Transportation (IYT) are both in good shape.
These 2 sectors give us continued optimism that the rally, which began more technical in nature, is now telling us that demand is increasing, and growth stocks did and are doing their job.
If IYT and SMH sustain this rally, we should see IWM and XRT take note.
Biotechnology (IBB) could be a very interesting sector to watch, independently of the others. Should IBB clear over the 200-WMA or 135, it’s possible we see a move up to 150! Real Motion and momentum have to catch up though and clear its 50-WMA.
Regional Banks (KRE), or our Prodigal Son, is in a world of his own. After the banking crisis of March that lasted 2 weeks, KRE is trying to bottom. Ending this past week inside the trading range of last week, we will be watching this sector carefully as well.
The Real Motion indicator, though, is most interesting as it is working a mean reversion. If momo does not rollover (as it did along with price on Friday) then maybe KRE can surprise.
Bitcoin (versus the US Dollar), the Family’s newest member, is in better shape than one would imagine given all the press. We could say the range between $25-30,000 makes the next moves clear, depending on the way the range breaks.
Momentum is flat, which supports the trading range until further notice.
The Economic Modern Family remains fairly divided. Is the next leg up or down? Does IWM or XRT take IYT and SMH’s lead or vice versa? Is IBB going to run up, reflecting real economic growth? Does KRE signal the all-clear or yet another pending banking crisis? And Bitcoin-will the decoupling from QQQs reverse or deepen?
We love the Economic Modern Family!
Have an enjoyable long weekend! Look for Mish on Fox Business Monday, on Making Money with Charles Payne.
For more detailed trading information about our blended models, tools and trader education courses, contact Rob Quinn, our Chief Strategy Consultant, to learn more.
“I grew my money tree and so can you!” – Mish Schneider
Get your copy of Plant Your Money Tree: A Guide to Growing Your Wealth and a special bonus here.
Follow Mish on Twitter @marketminute for stock picks and more. Follow Mish on Instagram (mishschneider) for daily morning videos. To see updated media clips, click here.
For more detailed trading information about our blended models, tools and trader education courses, contact Rob Quinn, our Chief Strategy Consultant, to learn more.
“I grew my money tree and so can you!” – Mish Schneider
Get your copy of Plant Your Money Tree: A Guide to Growing Your Wealth and a special bonus here.
Follow Mish on Twitter @marketminute for stock picks and more. Follow Mish on Instagram (mishschneider) for daily morning videos. To see updated media clips, click here.
Mish in the Media
Ahead of the Fed’s announcement, Mish shares her take on major currency pairs, starting with EUR/USD, in this appearance on CMC Markets.
Mish joins Ash Bennington to discuss the market’s response to today’s inflation data, the AI-powered tech rally, whether we’re seeing signs of exhaustion in equities ahead of the Fed announcement on Real Vision.
Mish explains how the Russell 2000 is the canary in a coal mine on Business First AM.
Mish offers her technical forecasts for gold, EUR/USD, USD/JPY and WTI Crude Oil ahead of today’s CPI report on CMC Markets.
Mish Schneider and TG Watkins continue their chat about the business of trading in this video from StockCharts TV. Topics range from their work/home life balance, how being a consumer does or does not play into their trading decisions, and what they do in their free time to unwind.
Mish and Nicole Petallides go over rates, key sectors and the economy in this video from TD Ameritrade. They also discuss what raw materials are coming into vogue.
Mish and Jon talk about what could make markets continue or reverse and what to buy right now on BNN Bloomberg’s Opening Bell.
Mish and Charles talk inflation fears, the “wall of worry” and trading large-caps on Fox Business’ Making Money with Charles Payne.
The first 5 months of 2023 have been rallying on optimism going forward. Will that continue for the next few months? Mish digs into that question in this Twitter Spaces conversation with Wolf Financial.
Mish discusses impacts of weather, labor market and the FED on tap on Fox Business’ Coast to Coast with Neil Cavuto.
The US dollar rallied following a positive US jobs report last Friday, but could the Federal Reserve’s upcoming interest rate decision halt the greenback’s rise? Mish offers her views on USD/JPY, the S&P 500, and light crude oil futures on CMC Markets.
Mish talks GME (Gamestop) and more on Business First AM.
Where is the US economy actually heading? Rajeev Suri of Orios discusses this question and what trends suggest with Mish in this video.
Coming Up:
June 19: Making Money with Charles Payne, Fox Business
June 22: Forex Premarket Show with Dale Pinkert
June 23: Your Daily Five on StockCharts TV
ETF Summary
S&P 500 (SPY): 440 pivotal.Russell 2000 (IWM): 23-month MA 193 still a bit away.Dow (DIA): 34,000 in the Dow now pivotal.Nasdaq (QQQ): 370 target hit proceeded by some selling.Regional Banks (KRE): 42 support, 44 pivotal.Semiconductors (SMH): 150 now major support.Transportation (IYT): 237 area the 23-month moving average.Biotechnology (IBB): 121-135 range.Retail (XRT): Back below the 200-DMA as the week ends. Granny could rule.
Mish Schneider
MarketGauge.com
Director of Trading Research and Education