Mish's Economic Modern Family consists of 5 key sectors, one major index and Bitcoin. Bring them all together and you have an easy and quick way to look at the market, grasp overall trends and see where potential pressure is leaning. Each symbol is meant to display a completely different aspect of the market, allowing us to better time our trade entries when looking at the big market picture.
The past week has been a wild ride for the Family. So let's dive into each member, along with specific price levels we are watching for Monday.
Let's start with the Granddad Russell. The small-cap Russell 2000 (IWM) has finally cleared past major resistance at $234.53. For the past 8 months, IWM has been floundering within its range, unable to clear to new highs. Now that it has cleared its pivotal area, we should watch for IWM to hold over its breakout price of $234.53.
Grandma Retail (XRT) also made a move to all-time highs and now has new support at $98.50. The next challenge for XRT is the coming holiday season, which still has a multitude of shipping issues companies will have to navigate. However, the Transportation sector (IYT) is looking to support Grandma Retail with a strong uptrend, showing that the movement of goods and U.S demand is strengthening. The main hurdle for IYT to clear is resistance at $282.40.
Another super-performing family member is Sister Semiconductors (SMH). Representing the tech side of the market, SMH has blasted off to new highs. With Friday showing a digestion/Doji Day, anyone interested in trading SMH should keep their risk very tight or watch for more consolidative price action to base risk from.
Next up is the Prodigal Son Regional Banking sector (KRE). Holding a strong bullish phase, KRE has support at $72.90 and more at $71.50.
With that said, the only underperforming sector is Biotech (IBB). On Friday, IBB gapped underneath its 200-day moving average at $160.24 and, though it attempted a recovery, it is sitting in a vulnerable place. IBB will need to clear back over Friday's high at $158.38 to regain upward momentum before it can test its major moving average.
Finally, the Crypto space has made leaps and bounds over the past 30 days, but recently the largest-cap coin — Bitcoin — sits in the middle of a range between 57k and 67k.
However, while Bitcoin has settled down for the moment, altcoins and companies related to the general crypto space have increased in volatility. Using our upcoming proprietary service CryptoPulse, which has a page dedicated to monitoring new equities involved in the crypto space, Mish's service was able to catch a +30% move in Bitfarms (BITF) this past week. The growing selection of crypto-related companies has allowed investors to access the crypto world without owning actual cryptocurrencies.
Overall, Mish's Economic Modern Family has made a large move in price last week leading to some key levels to watch. Come Monday, we will be watching for IWM to hold recent highs, Biotech (IBB) to clear back over the 200-DMA and Transportation (IYT) to clear all-time highs at $282.40.
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On this week's edition of StockCharts TV's Mish's Market Minute, Mish shows you the potential signs that the market might crack! She covers key intermarket relationships and does a deep dive into the market.
- S&P 500 (SPY): 460 minor support the 10-DMA.
- Russell 2000 (IWM): 234.53 support.
- Dow (DIA): 356.60 support.
- Nasdaq (QQQ): 382.78 main support. Digesting new highs.
- KRE (Regional Banks): 72.90 support area.
- SMH (Semiconductors): Doji day.
- IYT (Transportation): 282.40 resistance.
- IBB (Biotechnology): 153.38 support.
- XRT (Retail): 98.50 support area.
Assistant Director of Trading Research and Education