It is All Up to These Two-SMH and XRT

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Monday, Granny Retail went green. 

However, as I wrote last night, we still do not know if “in the current bearish phase, we know that short covering and premature buyers cause whipsaws.” 

So, I am going to make it real easy. 

Granny XRT, looking at the monthly chart, is under the 23-month moving average. 

That tells us the consumer and spending confidence is in a 2-year business cycle contraction. 

Recession, no. Stagflation, yes. 

XRT must either run up and clear that moving average in April or get ready for more pain. 

Even more interesting is our Sister Semiconductors SMH. 

In March, SMH fell to its 23-month moving average. 

Here it is the first day of April, and SMH is hanging onto the blue line for dear life. 

Why is this significant? 

A break of the 23-month will put SMH into a contraction for the first time since 2022-2023 during the aggressive rate hike cycle. 

We can draw a few conclusions if we combine these 2 important members of the Economic Modern Family. 

1. SMH holds or at least stays close to the 23-month and Granny XRT runs to its 23-month MA and stalls. 
2. SMH fails the 23-month and XRT falls further. 
3. SMH rallies from here (or XRT) and now we have nothing more than a correction and a tradeable low with a good solid bounce. 

 

Educational purposes only, not official trading advice.  

For more detailed trading information about our blended models, tools, and trader education courses, contact Rob Quinn, our Chief Strategy Consultant, to learn more. 

 

Join us in Dallas April 4-6
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Mish in the Media-Want to see more? All clips here  

Outlook 2025, the PDF This will set you up on the right side of the market along with many picks 

Podcast Geoff and Mish cover the importance of the monthly chart timeframe 03-31-25 

Business First AM Sage advice on how to trade this tumultuous market 03-31-25 

Business First AM Watching ELF Beauty 03-30-25 

Business First AM Tips on dealing with a market sell-off 3-27-25 

CNBC Asia Clip from Mish’s extensive interview on current and future market conditions 03-25-25  

 

Coming Up:  

April 2 Real Vision 

April 4 The Money Show in Dallas  

April 4 Live with Charles Payne on Fox from the Money Show 

April 10 BFM radio Maylasia  

April 11 BNN Bloomberg  

Weekly: Business First AM  

 

ETF Summary  

(Pivotal means short-term bullish above that level and bearish below)  

S&P 500 (SPY) Made a new yearly low and bounced-real? 575 still sits overhead 

Russell 2000 (IWM) 200 pivotal  

Dow (DIA) Back over the 50-WMA or 417 now support 

Nasdaq (QQQ) Made a new yearly low and bounced-real? Patience 

Regional banks (KRE) 55-60 the trading range to watch 

Semiconductors (SMH) 205 monthly support held 

Transportation (IYT) 63 support held 

Biotechnology (IBB) Broke down harder and did not recover-130 has to clear  

Retail (XRT) 70, then 72 resistance