October 7, 2025
Mish's Daily
By Mish Schneider
GRANNY RETAIL STUMBLES BELOW SUPPORT
Granny Retail (XRT) just lost her grip on the 50-day moving average, a key short-term support level that often marks the line between healthy pullbacks and trend reversals.
This isn’t just a technical trip — it’s a sentiment signal that the American consumer, long the backbone of this market, may be running low on gas.
If XRT can’t recover quickly, we could be looking at a phase shift from Bullish to Caution, and possibly even to Distribution.
WHY IT MATTERS FOR INVESTORS
Retail sits at the center of the Economic Modern Family — the pulse of the consumer and, by extension, the broader economy.
When Granny Retail weakens, it often precedes broader market fatigue.
Investors should pay attention because consumer spending drives 70% of U.S. GDP — when Granny sneezes, the market catches a cold.
Furthermore, KRE of the Regional Banks sector, already showed us signs of weakness with only a shallow bounce following news of Fifth Third Bank’s acquisition of Comerica Bank.
KRE has to hold around 63.00
The timing of this failure is crucial. The Fed remains caught between easing inflation and sustaining growth. Retail softness may be the first crack in the “soft landing” narrative.
If Granny Retail continues to weaken, the Fed’s path to rate cuts could narrow — not because inflation is roaring back, but because growth is rolling over.
TECHNICAL WATCHLIST
Keep an eye on COST, TGT, WMT, and AMZN — leadership in these names will determine whether the consumer narrative stabilizes or cracks further.
Also watch IWM (Small Caps) for confirmation; if both fail simultaneously, the risk-on trade could unwind quickly.
TAKEAWAY
Granny Retail’s stumble below the 50-DMA isn’t just another chart event — it’s a warning flag.
Retail stocks often lead turns in both directions.
If the consumer is finally feeling the strain, the next few weeks could tell us whether this market still has the spending power to sustain the rally — or whether the Family matriarch just signaled it’s time to take some profits.
Educational purposes only, not official trading advice.
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ETF Summary
(Pivotal means short-term bullish above that level and bearish below)
S&P 500 (SPY) 665 near term support
Russell 2000 (IWM) 239.40 last week’s low
Dow (DIA) 460.84 last week’s low.
Nasdaq (QQQ) 596.10 last week’s low
Regional banks (KRE) 63.00 needs to hold
Semiconductors (SMH) 322.43 last week’s low
Transportation (IYT) 70 huge support Thru 73 interesting
Biotechnology (IBB) 148 support
Retail (XRT) Unconfirmed caution phase
Bitcoin (BTCUSD) 119,000 support
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