If the market could talk, it might say that the Economic Modern Family is happy. Perhaps happier than they have been in a long time.
Starting Friday, Forrest and I pointed out that the Russell 2000, Transportation and Retail all closed green in the face of the news on Trump and with tech falling by 4%. On Monday, that trend continued. IWM made the largest percentage gain over the other 3 indices; IYT and XRT held their own as well.
The best percentage gainer in the family today was Big Brother Biotechnology, another sector we both pointed to watch last week.
With the news of Regeneron (REGN)'s Experimental polyclonal antibody cocktail helping Trump recover and the accelerated race for a vaccine and a way to alleviate symptoms of COVID, IBB rallied over 4%.
Last Friday, IBB was flirting with the 50-DMA. Now, it's well over, and with a strong move back over the 10- and 50-day moving averages, we could see a move back to July's highs.
Speaking of the Modern Famly, Regional Banks (KRE) closed up 3.98%. That was not far off from IBB, which was up 4.28%. KRE has consistently been the weakest link in the Family. A comeback from its recent September lows was well-needed, as many have been worried about this sector.
As the week continues, we need to see the Family continue to take the lead. Yes, some of this strength is on Trump's recovery, but most of it is on the assumption some stimulus will be passed.
Regardless, if you believe that price rules, then the Family is reflecting all of the optimism in the face of continuing doom and gloom perpetuated by the pundits.
- S&P 500 (SPY): Needs a second close over 336 and a clearance over 343
- Russell 2000 (IWM): 160 resistance, 153 support
- Dow (DIA): 284 resistance, 277 support
- Nasdaq (QQQ): 276 support. Needs to clear 283
- KRE (Regional Banks): Unconfirmed Bullish phase needs a second close over the 50-DMA
- SMH (Semiconductors): 181 resistance. Needs to hold the 50-DMA
- IYT (Transportation): 203 pivotal
- IBB (Biotechnology): 138 now support, 143 resistance.
- XRT (Retail): Granny could make new all-time highs
Director of Trading Research and Education
Assistant Director of Trading Research and Education