Mish's Market Minute

Can Transportation Lead the Market Higher?

 | 

Mish's Economic Modern Family is made up of 5 key sectors and 1 index. Each member has been specifically chosen to help investors/traders navigate the market by giving an easy way to see emerging trends and important price levels.

The Family consists of:

  • Granddad Russell 2000 (IWM)
  • Granny Retail (XRT)
  • Transportation (IYT)
  • Prodigal Son Regional Banks (KRE)
  • Brother Biotech (IBB)
  • Sister Semiconductors (SMH)

On Friday, IYT broke to new all-time highs. Additionally, IYT holds an important underlying value, as it represents the demand side of the market. If goods are being moved and people are traveling, that bodes well for every other Family member.

This is where IBB, XRT and KRE come in. All three have pulled back to major moving averages, which are often viewed as support levels. XRT and KRE are by their 50-day moving average and IBB is at the 200-DMA. With Transportation's support, come Monday, we can watch for these sectors to move higher as they spring off their moving averages.

With that said, while transportation has played its part as a leader, it will need participation from two special Family members: the small caps (IWM) and Semiconductors (SMH). On Friday, both were able to rally over their 50-DMAs by the close, which means that if both can hold over their MAs, the rest of the Family members, along with the overall market, will have a good reason to move upwards Monday.


Click here for a rare chance to watch Mish's interview on Real Vision with Max Wiethe! The password is: 2021Schneider0325

Also, watch Mish take a fresh look at Emerging Markets in this week's edition of StockCharts TV's Mish's Market Minute. These have have fallen a bit behind the US performance due to COVID and trade issues; is this a good time to start thinking forward and looking at them as the next opportunity?


ETF Summary

  • S&P 500 (SPY): Support 386.52; 398.12 Resistance.
  • Russell 2000 (IWM): Needs another close over the 50-DMA, 220.52
  • Dow (DIA): 332.86 high to clear
  • Nasdaq (QQQ): Needs to stay over 309, 312 pivotal, 321 resistance and key
  • KRE (Regional Banks): Support 50-DMA at 63.16
  • SMH (Semiconductors): 238 needs to hold as new support
  • IYT (Transportation): New highs
  • IBB (Biotechnology): Main support the 200-DMA at 144.77
  • XRT (Retail): Support 82.13; needs to clear 10-DMA next


Mish Schneider

MarketGauge.com

Director of Trading Research and Education

Forrest Crist-Ruiz

MarketGauge.com

Assistant Director of Trading Research and Education

Mish Schneider
About the author: serves as Director of Trading Education at MarketGauge.com. For nearly 20 years, MarketGauge.com has provided financial information and education to thousands of individuals, as well as to large financial institutions and publications such as Barron’s, Fidelity, ILX Systems, Thomson Reuters and Bank of America. In 2017, MarketWatch, owned by Dow Jones, named Mish one of the top 50 financial people to follow on Twitter. In 2018, Mish was the winner of the Top Stock Pick of the year for RealVision. Learn More
Subscribe to Mish's Market Minute to be notified whenever a new post is added to this blog!
comments powered by Disqus