Stock Market Stuck with a Plethora of Mixed Signals

February 5, 2023

Mish's Daily

By Mish Schneider

Written by Michele Schneider

If you are having a hard time figuring out the market’s next moves:

  1. Think trading range-
    • the 2023 Outlook spells out reasons for a 1000-point trading range potential in the SPY from 3200-4200.
    • We are adding that the NASDAQ 100 through QQQ can head to 330 before topping out. Then just as easily skid to support at 230.
  1. Think about this-the relationship between the high yield/high debt bonds and the 20+ year long bonds is as mixed up as you.

On the one hand, finally, the high yield bonds are just starting to outperform the long bonds-risk on. (See down arrow)

On the other hand, the real motion momentum indicator flashed a mean reversion on junk bonds. (See up arrow) (Check out our Big View this weekend for the latest on key market internals)

So the indices are stuck. The bond relationships are stuck. The economic data is stuck. Recession coming or soft landing achieved? Stuck.

What about inflation, geopolitical stress, climate issues and food shortages along with wage increase demand and social unrest?


Perhaps the Economic Modern Family can help.

The Russell 2000 (IWM) or Granddad of the Economic Modern Family, had a golden cross, and cleared the December highs (not the August ones though).

202 is where major resistance from the 23-month MA sits. Real Motion shows new highs in momentum. A positive.

Triple Play shows leadership against the benchmark. A positive.

Granny Retail (XRT) shows similar technical patterns.

Forget the rest and just look at Granny and Gramps, one should think blue skies.

Look at the 23-month moving average though at 78.00, and XRT trades well below that level.

Until proven otherwise, trade with a mindset that the market is approaching the top of the range.

Also, do not get overly complacent about inflation peaking-we still see a potential trainwreck.

However, the modern family has an amazing track record. That means above these range resistance levels, follow their lead.


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

Yahoo Finance Week Wrap up 02-03-23

CMC Markets-Trading the Tech Heavy Earnings Reports 02-01-23

Chuck Jaffee Money Life 01-31-23 (after minute 27)

Cheddar TV 01-30-23

Real Vision 01-27-23 and on our Youtube channel

BNN Bloomberg 01-27-23 or on our Youtube

Making Money with Charles Payne 01-26-23

The with JD Durkin 1-26-23 or on our YouTube

CMC Markets-Video on Commodities 01-25-23 and on our MG Youtube

ETF Summary

S&P 500 (SPY) Target 420 with 390-400 support

Russell 2000 (IWM) 190 now support and 202 major resistance

Dow (DIA) 343.50 resistance and the 6-month calendar range high

Nasdaq (QQQ) 300 is now the pivotal area

Regional banks (KRE) 65.00 resistance

Semiconductors (SMH) 246 is the 23-month moving average-can she hold? Sister Semi’s is the hare this past week

Transportation (IYT) It’s like chips are on a bullet train-this 23-month MA is 244-we are back below that level

Biotechnology (IBB) Sideways action

Retail (XRT) 78.00 the 23-month MA resistance and nearest support 68.00

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