Small Caps-The Win? Retail-The Maybe?

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You all know how focused I am on the Granddad and Grandmother of my Economic Modern Family.

And, while SPY and NASDAQ soared to new highs, the Russell 2000 IWM and Retail XRT performed well, but not near new all-time highs well.

There was a perception going in that a Trump win would be better for Small Caps.

As Trump campaigned on increasing American manufacturing, Trump policies could also improve economic conditions and growth.

Furthermore, he proposes tax cuts, which along with reshoring, help small cap US-focused business the most.

While IWM rallied up 2 times more than the other indices today, and on pace to get to all-time at $244.50 the 2021 highs, it still needs to.

So, the Fed meeting could be the ultimate trigger.

Or the disappointment.

Granddad Russell 2000 IWM also needs retail or what we call grandma XRT to join in.

That spectacular 10-month trading range is still intact.
Over 80 in XRT we assume that trump policies perceived as deflationary and with the FED potentially cutting rates will be great for both IWM and XRT.

The IWM chart shows a wonderful gap higher.

IWM now outperforms SPY.

Plus, the momentum improved significantly.

Can IWM keep going? So much depends on the FED and interest rates.

XRT also enjoyed a gap higher, but not nearly as pretty as IWM’s.

XRT must clear and hold above 80.00.

Furthermore, XRT outperforms SPY by a little and momentum rose but not by nearly enough.

The inside of the Family has more to prove.

 

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

Benzinga Pre-Market Prep Mish and Benzinga talk China, commodities, the economy, rates and the election 10-28-24

Business First AM The new thin economy 10-23-24

Geoff and Mish Podcast Geoff and Mish Walk you through how phase changes create great trading opportunities in any market condition 10-22-24

ProInvestor Insights The Economic Modern Family is Teaching Investors Patience IS a Virtue! 10-21-24

Business First AM Mish goes shopping and tells you how to pick a bottoming stock 10-21-24

 

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ETF Summary

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

S&P 500 (SPY) Runaway gap or island top???

Russell 2000 (IWM) 227 support 244 the area to clear

Dow (DIA) New highs

Nasdaq (QQQ) 500 support

Regional banks (KRE) See how ranges work? This cleared 62 and off to the races

Semiconductors (SMH) 265 resistance

Transportation (IYT) We have a Dow theory thing going on-71 now key to hold

Biotechnology (IBB) 140 support 147 resistance to clear

Retail (XRT) 76 support 80 to clear

iShares iBoxx Hi Yd Cor Bond ETF (HYG) 79.50 pivotal and interestingly HYG still below