After oil surges in volume from the U.S import ban on Russian oil, the Oil ETF (USO) closed roughly unchanged from its opening price. This makes USO interesting to watch for Wednesday's trading session, since the price action shows a large battle between buyers and sellers remains underway.
Having said that, the stocks markets' reaction remains choppy, with investors watching prices at the pump increase along with other commodities getting hit with higher transportation costs. With the cost to move goods increasing, this can negatively impact inflation numbers, which have already passed over 7%. Nonetheless, the major indices are still holding above recent support levels.
With that said, let's look at how specific sectors are doing within Mish's Economic Modern Family. One sector that's always good to keep an eye on is the transportation sector (IYT), which is holding over support from the lows at $243 – 245. IYT will be especially interesting to watch if oil prices continue higher.
Along with the increase in shipping prices, we should also monitor the retail space through the retail ETF (XRT). Currently, XRT is holding over its recent gap low from 2/24. It can be useful to watch both XRT and IYT together, as each can hint at a possible economic long-term slowdown through the movement and buying of goods. Therefore, investors can watch for each to hold or break under key support levels as seen in the above charts.
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ETF Summary
- S&P 500 (SPY): 410 support.
- Russell 2000 (IWM): 188 support.
- Dow (DIA): 322 support.
- Nasdaq (QQQ): 318 support.
- KRE (Regional Banks): 65.46 next support.
- SMH (Semiconductors): 246 pivotal.
- IYT (Transportation): 243-245 support area.
- IBB (Biotechnology): 118 support.
- XRT (Retail): 70 support.
Forrest Crist-Ruiz
MarketGauge.com
Assistant Director of Trading Research and Education
