April 12, 2021
By Mish Schneider
Written by Forrest
Monday the Economic Modern Family which consists of 1 index and 5 key sectors showed mixed signals as half of the Family closed down for the day.
Currently, the Russell 2000 (IWM), Biotech (IBB) and Semiconductors (SMH) are down with Transportation (IYT), Retail (XRT), and Regional Banks (KRE) up on the day.
With SMH lingering in all-time high territory, IWM and IBB are the most worrisome of the bunch, as both sit near pivotal price levels made by their major moving averages.
For IWM the 50-Day moving average at $222.28 (Blue Line) and IBB, way weaker, sits above the 200-DMA at $145.55 (Green Line).
The key difference is their behavior around their moving averages.
For example, if you look at IWM, you can see that it has broken through its 50-DMA 4 consecutive times in the last 4 trading days.
IBB already broke its 50-DMA but now has respected its moving average.
Out of the 4 recent days it came close to breaking, it only broke once on March 5th.
This shows that if IBB breaks its 200-DMA and closes under, it will have much more meaning.
It could impact the IWM to finally break its 50-DMA.
Because IWM cannot be trusted to hold its moving average, we can look at the bigger picture as the 50-DMA represents more of a price range to hold near, than a specific price level to put technical weight on.
This means that for Tuesday’s trading session, if IWM decides to head lower it will need to hold recent support of $219.39 from the April 8th, while IBB needs to hold over its 200-DMA at 144.55.
If IBB does break under its moving average and into a distribution phase always watch for a second close under the moving average to confirm the phase change.
S&P 500 (SPY) Made New highs.
Russell 2000 (IWM) 219.39 support. Resistance 226.69
Dow (DIA) 333.43 support.
Nasdaq (QQQ) 338.19 high to clear. Support 321.40
KRE (Regional Banks) Needs to hold over 68.15.
SMH (Semiconductors) Bounced off the 10-DMA 250.07.
IYT (Transportation) New highs.
IBB (Biotechnology) 145.55 support.
XRT (Retail) Needs to clear 93 then 96.27.
Volatility Index (VXX) Needs to find support.
Junk Bonds (JNK) support 108.58 the 50-DMA
LQD (iShs iBoxx $Inv Gd Cor Bd ETF) 131.61 next resistance area the 50-DMA.
IYR (Real Estate) Held over the 10-DMA at 93.50.
XLU (Utilities) Doji day. 64.19 support.
GLD (Gold Trust) Held the 10-DMA at 161.78.
SLV (Silver) Watching for second close under the 200-DMA at 23.13
VBK (Small Cap Growth ETF) 282.30 resistance area from the 50-DMA.
UGA (US Gas Fund) 31 support area. 32.66 resistance.
TLT (iShares 20+ Year Treasuries) 134.97 support. 138.66 resistance.
USD (Dollar) Needs to hold over 92.00
MJ (Alternative Harvest ETF) Broke support at 21.55.
WEAT (Teucrium Wheat Fund) Failed second close over the 50-DMA at 6.17
Every day you'll be prepared to trade with: