Pay No Attention to That Tran Behind the Curtain?

May 26, 2024

Mish's Daily

By Mish Schneider

For the sake of redundancy and in case you are living under a rock and just came out to read my Daily, Nvidia (NVDA) and its ginormous beat on revenues, gave the market new life.

Happily, our very own Sister Semiconductors, SMH, moved up to new all-time highs and gave our portfolios quite a boost.

Nonetheless, she has a Family.

They are:

Granny Retal XRT
Granddad Russell 2000 IWM
Big Brother Biotechnology IBB
Prodigal Son Regional Banks IBB
Transportation IYT
Bitcoin BTCUSD

Read more about them and why I call them the Economic Modern Family.

While SMH has soared to new heights, the rest of the Family are far more sobering.

In fact, a couple of the members could be flashing something way more insidious than artificial intelligence is the panacea for everything.

Let’s look at the weekly charts.

XRT had a huge run 2 weeks ago because of GameStop (GME) and AMC. Then the sector sold off with the abysmal Target earnings (TGT) and low consumer confidence.

The chart tells us that XRT must perform this coming week and pull herself up and away from the lower channel line.

Any further weakness, we need to watch the 200-WMA (green) to hold.

IWM looks better. However, that index first needs to clear the top of the channel line which corresponds with the March high.

Plus, 200 or the bottom of the channel is key support to hold.

IBB has more work to do. It does though look promising if the price can climb over the 200-WMA and then over the top of the channel line.

SMH can take some time off this week and consolidate within the trading range of this past week.

She needs to wait and see how her family does. One thing we know from experience, our Sister only has legs for so long.

At some point she looks back and without her Family in tow, sells off.

Bitcoin is represented here by a daily chart.

Friday ended with an inside day, above the 50-DMA.

Momentum, according to our Real Motion indicator, tells us that he too has some work to do this week to look excited about all the recent headlines.

Finally, we have the two weakest siblings.

Transportation IYT doesn’t seem to care very much about AI right now.

In fact, one could argue that IYT hates the idea of AI given that the sector closed poorly for the 2nd week in a row.

Why? Rising freight rates, labor issues, consumer slow down, and contraction in some areas of manufacturing all are contributing factors.

But who needs to gauge the US economy on how robustly goods (you know, things like food and oil) are moving when we can ChatGPT our way into surviving!?

IYT landed on the 50-WMA (blue). This is who we are watching as we imagine at some point so will SMH if the decline continues.

Regional Banks KRE also had a rough week. We hoped to see KRE clear the 23-month MA. Instead, KRE failed the channel line once again.

Now, KRE must reverse and give the rest of the Family some hope.

A trip to and under the 50-WMA will not bode well as commercial real estate (a big part of this sector) becomes a further drag.

The famous line from the Wizard of Oz (let’s call this wizard Jensen Huang), “Pay no attention to that man behind the curtain,” revealed that the wizard is only human.

In this case, what might remind him and all the investors (including us) in NVDA that they too are only human, is if the caution sign we see in Transportation flashes brighter.

Check out the interview Mish did with Real Vision and Maggie Lake.


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.

Traders World Fintech Awards

Get your copy of
Plant Your Money Tree: A Guide to Growing Your Wealth

Grow Your Wealth Today and Plant Your Money Tree!


Mish in the Media-Want to see more?
All clips here

Real Vision The Daily Briefing Without commercials 05-24-24

CNA Asia First Mish covers Ethereum, Nvidia and Transportation 05-24-24

Phoenix TV China Mish talks about China accumulating gold and why 05-23-24

Singapore Radio What to expect from Nvidia earnings and the trouble with transportation 05-20-24

Business First AM The Sky High Club is missing Granddad Russell 2000 05-20-24

Kitco News Team Stagflation fears to drive gold and silver higher 05-17-24

CNBC Street Signs Singapore Mish talks about the opportunities and pitfalls in equities 05-17-24

BNN Bloomberg Momentum, Warning Signs and Commodities Thoughts 05-16-24

Final Bar with Dave Keller Mish and Dave discuss commodities, the move to all time highs in indices and a tariff pick 05-14-23

Making Money With Charles Payne Mish and Charles discuss transportation index and Fed policy mistakes-plus a few picks 05-09-24


Coming Up:

May 28 Making Money with Charles Payne

June 13th MoneyShow Virtual Expo -Topic Stagflation Survival Guide: Building Wealth Amid Economic Challenges

Weekly: Business First AM, CMC Markets,


ETF Summary

S&P 500 (SPY) Nasty bearish engulfing pattern, but not conclusive

Russell 2000 (IWM) 210.80 ATHs resistance 200 support

Dow (DIA) From 40k to sitting on the 50-DMA

Nasdaq (QQQ) Nasty bearish engulfing pattern, but not conclusive

Regional banks (KRE) Watching the range

Semiconductors (SMH) Inside day which is key to watch which way it goes on Tuesday

Transportation (IYT) Clutch-must hold or else-now in distribution phase

Biotechnology (IBB) 135 support 140 next resistance

Retail (XRT) At least this closed back above the 50-DMA

iShares iBoxx Hi Yd Cor Bond ETF (HYG) 77.00 once again pivotal support

Improve Your Returns With 'Mish's Daily'

Michele 'Mish' Schneider

Every day you'll be prepared to trade with:

  • Unique insight into the health and future trends in markets
  • Key trading levels for major ETFs
  • The 'Modern Family' advantage
  • Actionable trading ideas in stocks and ETFs across all asset classes
Subscribe Now!