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:
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?
Stuck.
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 Street.com with JD Durkin 1-26-23 or on our YouTube
CMC Markets-Video on Commodities 01-25-23 and on our MG Youtube
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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
Every day you'll be prepared to trade with: