March 31, 2024
Mish's Daily
By Mish Schneider
The last time the Russell 2000 IWM closed out a month above the Bollinger Band we like to use, was in March 2021.
So, there is poetic justice to the anniversary date of the downtrend reversing to an uptrend exactly 3 years later.
The first quarter of 2024 also saw IWM close at the highest price level since it began its huge descent in January 2022.
We take that as a good sign for more rally.
Also noteworthy is the ratio between growth and value reached a resistance level.
Whether one wants to argue soft landing, no landing, recession, stagflation, higher for longer, rate cuts-the fact remains that a rotation into small caps for us who invented the Economic Modern Family, is a good thing.
Granddad Russell represents the small cap companies within the US.
IWM tells us that the economy is in good shape.
Great shape? Well, we are always climbing the wall of worry.
Just listen to the pundits.
“The economy is up because of government spending and loose monetary conditions.”
Maybe.
But for now, both Gramps and Granny are happier.
And remember, narratives are not very meaningful if price says something different.
We have seen narratives change on a dime as price rules.
Granny XRT also closed this quarter out on price levels not seen since early 2022.
Our sector rotation model tells us that XRT has risen in trend strength as well, climbing the ranks to number 3!
The consumer is not dead; however, we do see a shift in spending.
The “vanity” trade we have commented on February 26th, Is Granny Retail Set-up for Further Gains? mentions why the theory was born and what instruments to watch for setups.
We have seen consumers go from “All about We” to “All About Me.”
Looking at the monthly chart, the price cleared over the Bollinger band last month.
Granny is a bit stronger than Gramps and is in some ways more important.
The consumer is 70% of the US GDP.
Can XRT make it to 90?
I mean the price, not her age-she is way older than that!
As we start Q2 and go into earnings, we could see surprises in both small cap and retail companies, like the surprises we saw in large cap earnings in Q1-way better than expected.
What could ruin the party?
We think “ruin” is strong as the trend of anti-obesity drugs will continue to bring in new consumers to the vanity space.
Nonetheless as I wrote about the last few weeks, inflation is hardly dead.
So, love the rally, but also keep your eyes peeled on oil, grains, gold, silver, and gold miners-all which did very well last week.
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-All clips here
Business First AM Mish tells you why she likes gold miners and feels they could run more 03-28-24
Stockpick.app Mish covers why being a bull makes sense and yet, what signs we should keep our attention to 03-25-24
Business First AM Market strong, quants long and DJT new issue 03-25-24
CNA Asia First Where will money rotate after the FOMC-Mish talks to Singapore 03-20-24
The Morning Run BFM 89.9 Malaysia Business radio What’s next for interest rates, Fed policy and why we need to watch long bonds 03-20-24
Business First AM Mish checks the charts on commodity prices 03-20-24
CMC Markets Ahead of FOMC-here’s a tutorial on how to trade the dollar/yen, gold, oil, silver and natural gas 03-20-24
Schwab with Nicole Petallides -Mish covers her predictions and why solar should be watched along with commodities and long bonds 03-15-24
Real Vision Daily Briefing Mish goes through all the factors to watch for the stocks and commodities next big moves 03-18-24
Stockpick.app Mish schools viewers-clear and concise guide to the signs we are keeping our eyes on this week and why 03-19-24
Financial Sense Jim Pupluva Mish and Jim talk about the signs of inflation and recession-both are still on the table 03-15-24
Money Show with Mike Larson Listen as Mish’s predictions all come true from February in Las Vegas 03-14-24
Business First AM Identifying Warning Signs and why Alibaba 03-13-24
Coming Up:
April 3 Final Bar Stockcharts TV
April 9 Wealth365
Weekly: Business First AM, CMC Markets, and new to us-stockpick.app
ETF Summary
S&P 500 (SPY) 520 pivotal
Russell 2000 (IWM) 212 next resistance
Dow (DIA) 385 support 400 resistance
Nasdaq (QQQ) 440 the pivotal area
Regional banks (KRE) 45-50 range
Semiconductors (SMH) 223 support near term
Transportation (IYT) 68 area support
Biotechnology (IBB) 140-142 resistance 135 support
Retail (XRT) 77 now support
iShares iBoxx Hi Yd Cor Bond ETF (HYG) 77 big number to hold. Over 78 risk ON
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