Friday showed us that, even with the insecurity of the stimulus package passing and tension from job loss, the Modern Family was still able to close strong for the week.
Grandpa Russell (IWM), which has been in a consolidation period for the last 6 weeks, has closed over resistance at 159.82, which was created on August 11th. In fact, IWM has gained about 12% since the start of October! This breakout brings IWM back into the price range from before the crash in January.
Transportation (IYT) broke all time highs this week, trading up to 210.90! What makes this more important is that it cleared resistance going back to 2018. Furthermore, the optimism for a real recovery is best reflected in IYT.
Granny Retail (XRT) has been on a good run, but confirmed more strength this week when she held over her September high of 53.66 and close on a new all-time high.
Regional Banks (KRE), who many are worried about, have finally made a notable comeback and hopefully, with more strength this time, can head up towards the 50-WMA. However, KRE could not close the week over 40.00. This sector, although improved, remains a sticking point for the MF.
Big Brother Biotech (IBB) had a recent surge with vaccines entering trial stages. This looks as though it could bring him back to all time highs.
Sister Semiconductors (SMH), like Granny Retail, has broken over her September high and held. Never one to miss the party, SMH has many wondering about rebalancing their portfolios away from tech. We say lighten and tighten, but no need to exit this group yet.
With current underlying strength in Modern Family, it's hard to take a negative stance, especially since this is the first time in years where we can report that the MF is showing leadership!
Even with the uncertainty of the presidential election looming ahead, the strength and optimism of the market (and the economy) isn't something you want to trade against. You just have to be smart about asset allocation, watch volatility (now very cheap) and make sure you keep risk reasonable.
In this week's edition of Mish's Market Minute, Mish runs through a brief overview of what is happening in the general markets. After that she dives into her top 13 picks from last week and reviews positions that were taken, ones that are still in process and what to do with them now. Also, as a bonus, she adds 3 new stocks to the list.
- S&P 500 (SPY): Took out the September high. Now if holds 343, could see a test of July highs
- Russell 2000 (IWM): 159-160 support area - now just 1.8% away from all-time highs
- Dow (DIA): 280 support, resistance 292
- Nasdaq (QQQ): 280 support, 289 resistance.
- KRE (Regional Banks): Resistance at 40-42; 38 support
- SMH (Semiconductors): New all-time highs
- IYT (Transportation): New all-time highs
- IBB (Biotechnology): 137 support, resistance 146
- XRT (Retail): 53.50 needs to hold - as first one to show real strength, she could be first to drop if market weakens
Mish Schneider
MarketGauge.com
Director of Trading Research and Education
Forrest Crist-Ruiz
MarketGauge.com
Assistant Director of Trading Research and Education
