We continue to use Mish’s economic Modern Family of stock market ETFs to successfully navigate through the pandemic, as well as to provide insights that will guide us through a year that has three main market pressures:
Geopolitical stress from the current Russian/Ukraine war, inflation, and rising interest rates.
Last year’s dip-buying was all the rage as a large portion of the market ran rich with money provided by the Fed.
Now traders are finding the market tough to navigate with weak trends that can easily reverse.
This is why we use the “Modern Family” for market timing.
Currently, these ETFs are hitting resistance areas that if not cleared, can spell more choppiness and rangebound trading ahead.
The Economic Modern Family consist of:
Russell 2000 Index (IWM)
Transportation (IYT)
Retail (XRT)
Regional Banking (KRE)
Biotech (IBB)
Semiconductors (SMH)
Bitcoin
Currently, IWM and IYT have resistance from prior highs in February as seen in the above chart.
Additionally, KRE and SMH need to clear resistance from either the 50 or 200-day moving average.
With that said, if KRE and SMH can clear resistance, every member would be over their 50-Day moving average.
However, it’s more likely that we will see more chop/volatility as the rest of the symbols struggle to hold or clear.
The main takeaway is that we can see obvious levels across the Family that need to clear.
If they don’t clear, this can give us a reason to wait before looking for more trade setups.
Stock Market ETFs Trading Analysis & Summary:
S&P 500 (SPY) 446 to hold.
Russell 2000 (IWM) 209 to clear.
Dow (DIA) 349 resistance.
Nasdaq (QQQ) 350 to hold. The 50-DMA.
KRE (Regional Banks) 73 to clear. The 50-DMA.
SMH (Semiconductors) 273.61 resistance.
IYT (Transportation) 270.60 resistance.
IBB (Biotechnology) 128.81 support.
XRT (Retail) 80 key resistance.
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.
