The transportation sector (IYT) has entered back into a bullish phase. (A bullish phase is when the price is over the 50-day moving average, and the 50-DMA is over the 200-DMA.) IYT is now back in line with the rest of its Economic Family members who, as a whole, give a clear way to see market direction.
Here is a quick rundown of where the other Family members sit. Grandad Russell 2000 (IWM) made all-time highs. Granny Retail (XRT) is now consolidating after going through some wild swings created from stocks like GameStop (GME) and other popular Reddit picks. Prodigal Son Regional Banks (KRE) is sitting at monthly highs with resistance to clear at 59.86. Big Brother Biotech (IBB) made new all-time highs. Sister Semiconductors (SMH) sits in the middle, with highs at 246 and support at 223.72.
Each member was specifically chosen to show a different but essential piece of the market. But knowing what to watch is 10 times more useful when paired with a basic guiding tool.
That is where the simple moving averages come in. Right now is a perfect bullish situation, with all the Family members sitting above their 50-DMAs. Even though IYT triggered a warning when it broke its 50-DMA, it soon recovered.
The main point is to watch if members are moving together or breaking off into their own direction, based on their price relative to their moving averages. This is not only useful for key sectors, but also when viewing specific stocks. You can easily see strength or weakness by what phase a security is in.
Circling back to the transportation sector and its recent turn to caution back to bullish, this becomes a focus on whether or not this rally sustains. IYT, simply put, must hold its 50-DMA or bullish phase to keep the market strong.
If you find phases useful, consider learning about all 6 and how to use them in Mish's book (Plant Your Money Tree).
Watch Mish make an appearance on Fox Business (Making Money with Charles Payne) with some great stock picks!
In this week's edition of StockCharts TV's Mish's Market Minute, Mish covers 25 stocks from this week's earnings reports. Sectors covered include Healthcare, Pharma, Solar, Industrials, FAANG, Tech, Financials and E-Commerce. Here you will find great actionable information for momentum and value traders alike.
- S&P 500 (SPY): New highs
- Russell 2000 (IWM): New highs
- Dow (DIA): 312.71 resistance
- Nasdaq (QQQ): New highs.
- KRE (Regional Banks): Support 53.26, resistance 60
- SMH (Semiconductors): 246.79 resistance; support 223.08
- IYT (Transportation): Confirmed back into a bullish phase over the 50-DMA at 22.95
- IBB (Biotechnology): New highs
- XRT (Retail): 75.28 support
Mish Schneider
MarketGauge.com
Director of Trading Research and Education
Forrest Crist-Ruiz
MarketGauge.com
Assistant Director of Trading Research and Education
