Reserve Chairman Jerome Powell's speech this past week cautioned against prematurely loosening monetary policy.

Powell's speech reminds us that the Fed is focused on keeping inflation under control. Nonetheless, what we also learned this week is that technical matter. It is far more crucial to monitor price movements and utilize technical indicators for momentum and market direction.

The overall market has been heading higher, and both the S&P 500 (SPY) and Russell 2000 (IWM) have crossed critical areas of support. The 50-day moving average, in fact, cleared in all indices and most key sectors. Now, we focus on the overhead resistance levels at higher price targets.

We turn to the charts of a couple of members of the Economic Modern Family to gain clarity. Transports (IYT) and Regional Banks "Prodigal Son" (KRE) are in focus, along with SPY. While not in the family, SPY is, however, a reliable indication of the health of large-cap and small-cap companies.

IYT has crossed the 50-day moving average. We featured this sector in particular both in blogs and in the media last week. Why? Because if goods are in demand and people are moving, then things are not so bad as many would have you believe.

Momentum indicators illustrate resistance, however. Hence, we will watch the 50-DMA to hold, but also anticipate selling to come in at around the 240 level. The 50-DMA is the go-to right now everywhere.

The 200-DMA has stopped the rallies since the big breakdown in April.

Similarly, "Prodigal Son" regional banking (KRE) is also above the 50-day moving average and fighting hard to regain a daily, weekly and monthly longer-term uptrend.

KRE has a lot of work to do to rally over 65.00 and then hold.

While IYT and KRE crossed their 50-DMAs last Wednesday, SPY and IWM finally caught up on Friday. Now, both must confirm by holding those levels. IWM has better momentum according to our MarketGauge Real Motion indicator. Hopefully, that means something next week.

How long will this rally last? Note the levels on DIA and QQQ listed below. Also, get ready for some key economic numbers, such as CPI. And most importantly, think "active," know your risk, take profits on rallies AND, until further notice, be aware this is still a bear market rally, using phases as our navigation.

This week on media, Mish talked a lot about the macro and the technical -- please be sure to have a listen.

Traders can gain an advantage in the market by using MarketGauge's proprietary technical analysis tools, such as the triple play indicator, comparable market phases, downward momentum, volume analysis and positive trend strength (TSI), used in conjunction with the Modern Family to make better-informed trading decisions.

To learn more about how to identify trend changes using indicators and the Modern Family, reach out via chat, phone, or email, or book a call with Rob Quinn, our Chief Strategy Consultant, by clicking here.

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Follow Mish on Twitter @marketminute for stock picks and more. Follow Mish on Instagram (mishschneider) for daily morning videos. To see updated media clips, click here.

Mish in the Media

Mish joins Maggie Lake of Real Vision Finance to talk about key levels for stocks, bonds, crypto and the dollar. Mish also shares critical information about hot sectors such as solar and EVs, emerging markets and trends, and the all-important commodity sector.

In this appearance on Nasdaq Talks, Jill Malandrino and Mish talk Fed, dollar, moving averages and stock picks.

On the Friday edition of Cheddar TV's Opening Bell, Mish covers the EU, U.S. and what to watch for concerning Fed, econ stats and technicals.

Mish discusses how meme stocks are formed, where to find them and how to trade them on CNBC Asia.

Mish tells you why and what she is looking to buy right now on this appearance with Charles Payne on Fox Business.

Read Mish's latest article for CMC Markets, titled "The Most Important Sector to Watch Right Now".

In this appearance on Neil Cavuto's Coast to Coast on Fox Business, Mish gives a quick rundown on how to assess what will happen next.

ETF Summary

• S&P 500 (SPY): 402 (50-DMA) must hold and if does, next is 410.
• Russell 2000 (IWM): 184-185 (50-DMA) must old and if it does, 190 is next.
• Dow (DIA): Closed at 322 (50-DMA) on the button.
• Nasdaq (QQQ): Closed at 307 (50-DMA) on the button.
• KRE (Regional Banks): 62.70 (50-DMA) held; now 65 must clear.
• SMH (Semiconductors): STILL the weakest -- 215 needs to hold.
• IYT (Transportation): 232 must hold (50-DMA), 240 resistance.
• IBB (Biotechnology): 125 support, 128.50 (200-DMA).
• XRT (Retail): Must hold 65 area now; if fails, could be early warning sign.

Mish Schneider

MarketGauge.com

Director of Trading Research and Education