Last night, we drilled down into the entire Economic Modern Family by looking at the weekly charts.
With very similar chart patterns in the IWM and in IYT we surmised that both, still trading within the big ugly red bar from 2 weeks ago, are indecisive.
We thought today could be the day when both would launch following the lead of their Family member Sister Semiconductors.
We hoped that the strength in the S&P 500 and NASDAQ 100 would offer IWM and IYT inspiration.
Instead, both struggled to stay green. Neither were able to pierce their overhead 200 DMAs.
By the end of the day, it was IWM and IYT who led the rest of the market down.
Since like Lego’s, the market has been snapped together by a combination of a dovish Fed and persistent yet unfounded news of a trade deal with China,
Will IWM and IYT build a new foundation or become part of the rubble?
The charts are weekly with the blue line the 50-WMA and the green line the 200-WMA.
Right is the chart of IWM.
As mentioned yesterday, it held support lower or around 151.80.
It’s still trading within the big ugly red bar from 2 weeks ago, which looks indecisive.
Yet, it has failed to clear back over the 50-WMA after spending two weeks above it. That could be negative.
Transportation IYT, is a mirror of IWM.
With Semiconductors SMH still rocking, mainly because of Advanced Micro Devices AMD, up nearly 12% today, it’s a bit premature to say if the Lego pieces will remain rubble.
However, Should SMH fail and close below today’s low or 106.42, IWM and IYT will be waiting for her and the rest of the Family, knee-deep in unsnapped Lego pieces.
Incidentally, our quant model NASDAQ All-Stars is in AMD, as is our discretionary service Mish’s Market Minute Advantage.
S&P 500 (SPY) – Made another new swing high today at 284.36. Today’s low 281.41 now must hold on a closing basis.
Russell 2000 (IWM) – 154 is the best nearby support level to hold. 157.45 is the 200 DMA resistance to clear as this is the only holdout of the 4 indices still below the 200-DMA.
Dow Jones Industrials (DIA) – 257 is the underlying support. 260 the pivotal resistance
Nasdaq (QQQ) – New swing high today at 180. Has to hold/close over 178.29
KRE (Regional Banks) – 55 is pivotal now with 56 a place of resistance to clear and 54.00 pretty important support to hold.
SMH (Semiconductors) – Watch 107.49-106.42 as the range to break one way or another
IYT (Transportation) – This failed the 185.65, which was the first important support level. Unless this opens above there and holds for the day, I’d take that as fair warning for the bulls.
IBB (Biotechnology) – 115 resistance and 110.40 the best underlying support
XRT (Retail) – It’s all about 44.55 the 200-WMA pivotal point
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