January 29, 2020
By Mish Schneider
Last night we asked, “Was that the V-bottom (in the Russell 2000 IWM) we have enjoyed throughout most corrections, or a bear flag and the start of much nastier downturn coming soon?
Although you cannot see the formations as clearly on the weekly charts, we do nevertheless, see the critical support that now must hold.
IWM confirmed the bullish phase today. However, the action did not impress.
Again, we watch to see if IWM holds above the 164 level and clears 165.40 next.
As far as the rest of the Family, Granny Retail XRT looks the most worrisome. Sitting on the weekly moving averages, XRT has to hang on to current levels.
Same is true for Regional Banks KRE.
Transportation IYT managed to clear back over the 50-DMA today for its unconfirmed bullish phase. Yet, IYT must do it again tomorrow to confirm. 195.49 is the key support.
Biotechnology IBB looks tepid. Trading below the range of the last 9 weeks and in a caution phase, the sector is at least holding the key support at 115.
That leaves Sister Semiconductors SMH. Trading under the 10-DMA but above the 50-DMA, SMH also had an inside day ahead of a few key earnings.
Under 139.77, especially by the end of the week, will not look healthy.
Russell 2000 (IWM) Support between 163.80-164.07 to hold
Dow (DIA) 284.12 is the 50-DMA with 290.35 resistance
Nasdaq (QQQ) 212.24 support with 222 pivotal.
KRE (Regional Banks) 54.00 is the 200-DMA. 56.55 resistance
SMH (Semiconductors) Major support 139.77. 145.65 resistance
IYT (Transportation) 190 next support. 195.50 pivotal
IBB (Biotechnology) 115.40 support 119 resistance
XRT (Retail) 43 support and 45.00 resistance
Every day you'll be prepared to trade with: