If you are having a hard time figuring out the market's next moves, start by thinking about trading range. The 2023 Outlook spells out reasons for a 1000-point trading range potential in the SPY from 3200-4200. We are adding that the NASDAQ 100, through QQQ, can head to 330 before topping out, then just as easily skid to support at 230.
Also, think about this--the relationship between the high yield/high debt bonds and the 20+ year long bonds is as mixed up as you. On the one hand, finally, the high yield bonds are just starting to outperform the long bonds-risk on. (See down arrow.) On the other hand, the real motion momentum indicator flashed a mean reversion on junk bonds. (See up arrow.)
(Check out our Big View this weekend for the latest on key market internals)
So the indices are stuck. The bond relationships are stuck. The economic data is stuck. Recession coming or soft landing achieved? Stuck. What about inflation, geopolitical stress, climate issues and food shortages, along with wage increase demand and social unrest?
Stuck.
Perhaps the Economic Modern Family can help.
The Russell 2000 (IWM) or Granddad of the Economic Modern Family, had a golden cross, and cleared the December highs (though not the August ones). 202 is where major resistance from the 23-month MA sits. Real Motion shows new highs in momentum. A positive.
Triple Play shows leadership against the benchmark. A positive.
Granny Retail (XRT) shows similar technical patterns.
Forget the rest and just look at Granny and Gramps, one should think blue skies. Look at the 23-month moving average though at 78.00, and we see XRT trades well below that level.
Until proven otherwise, trade with a mindset that the market is approaching the top of the range. Also, do not get overly complacent about inflation peaking--we still see a potential trainwreck. However, the modern family has an amazing track record. That means, above these range resistance levels, follow their lead.
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Mish in the Media
See Mish, a panel of experts and Yahoo Finance hosts cover jobs, trading ranges and the future of inflation.
Mish shares her views on how to approach the earnings announcements of Apple, Amazon, and Alphabet, and gives her technical outlook on how the earnings results could impact the S&P 500 and Nasdaq 100 in this appearance on CMC Markets.
Listen to Mish on Chuck Jaffe's Money Life, beginning around the 27-minute mark.
Kristin and Mish discuss whether or not the market has run out of good news in this appearance on Cheddar TV.
Harry Melandri and Mish discuss inflation, the Federal Reserve, and all the sparkplugs that could ignite on Real Vision.
Jon and Mish discuss how the market (still rangebound) is counting on a dovish Fed in this appearance on BNN Bloomberg.
Mish discusses price and what indices must do now in this appearance on Making Money with Charles Payne.
In this appearance on TheStreet.com, Mish and JD Durkin discuss the latest market earnings, data, inflation, the Fed and where to put your money.
In this appearance on CMC Markets, Mish digs into her favourite commodity trades for the week and gives her technical take on where the trading opportunities for Gold, oil, copper, silver and sugar are.
ETF Summary
- S&P 500 (SPY): Target 420 with 390-400 support.
- Russell 2000 (IWM): 190 now support and 202 major resistance.
- Dow (DIA): 343.50 resistance and the 6-month calendar range high.
- Nasdaq (QQQ): 300 is now the pivotal area.
- Regional Banks (KRE): 65.00 resistance.
- Semiconductors (SMH): 246 is the 23-month moving average--can she hold? Sister Semis is the hare this past week.
- Transportation (IYT): It's like chips are on a bullet train--this 23-month MA is 244--we are back below that level.
- Biotechnology (IBB): Sideways action.
- Retail (XRT): 78.00 the 23-month MA resistance; nearest support 68.00.
Mish Schneider
MarketGauge.com
Director of Trading Research and Education
