Mish’s Economic Modern Family is made from 7 keys symbols that act as a guide for the stock market macro picture.
The Family consists of the Small-cap index Russell 2000 (IWM), Transportation (IYT), Retail (XRT), Regional Banking (KRE), Biotech (IBB), Semiconductors (SMH), and Bitcoin.
Just about every member of the Family is within a bearish phase meaning price is trading underneath the 50-Day moving average while the 50-DMA is under the 200-DMA as seen in the above charts.
With that said, what do we see next in the eyes of the Family and how should we prepare for the coming trading weeks?
The first thing we should watch for next if we are expecting the downward trend to continue, is for members is to either break lower or stay below their pivotal price level.
Currently, many members are near pivotal support/resistance levels as seen by the black lines in the above chart.
If these levels cannot hold and stay below them, we can watch for the next step lower across the board.
We should also be careful of fake breakdowns.
These selloffs that are followed by quick reversals can trap short traders and trigger a rally.
With that said, when it comes to going short, we can also watch for rallies into resistance.
If more ETFs break down, watch for these black lines to act as new resistance levels once they are broken.
On the other hand, we should note that Bitcoin has a weak bearish trend.
While Bitcoins price is under the 50-DMA and its pivotal 40k price level, notice how the major moving averages are more neutral in their slope compared to the other Family members.
This shows that BTC has a stronger chance of turning around.
However, traders should be cautious of the space as BTC can easily break towards 36-34k.
Stock Market ETFs Trading Analysis:
S&P 500 (SPY) 410 is price support.
Russell 2000 (IWM) Needs to hold 187.
Dow Jones Industrials (DIA) 326 is the next price support area.
Nasdaq (QQQ) 317 is pivotal.
KRE (Regional Banks) 63.80 is now minor price resistance level.
SMH (Semiconductors) 237 is new price resistance.
IYT (Transportation) 239 is price support.
IBB (Biotechnology) 118 is next price support.
XRT (Retail) 72 is pivotal.
Twitter: @marketminute
The author may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not represent the views or opinions of any other person or entity.
