May 22, 2019
By Mish Schneider
Waiting to be fed and looking rather exhauted, the babies reminded me of how the economic Modern Family looks midweek.
Neither the indices nor the Modern Family had any phase improvements.
Plus, one sector had a phase deterioration.
The Fed, hardly our wren mother, also chirped in today.
“Patience”, they said.
Like our patient baby birds, if too much time goes by without feeding the market, the Modern Family’s survival is in jeopardy.
Biotechnology was a bright spot. IBB held the 200-week moving average (green line). Sector rotation? Perhaps.
Semiconductors SMH fell with QCOM. It broke down under the 50-WMA at 102, but is holding the 200-DMA at 101.33.
Transportation IYT, broke under the 50-WMA. IYT is the sector that deteriorated in phase. Now that it is below 189.20, the phase is an unconfirmed distribution phase.
Retail XRT is one step away from breaking under 42.12, after already breaking below all moving averages.
The Russell 2000 IWM, trades in a range inside last week’s range. With a modicum of strength in IBB, the way IWM’s range breaks will be very important.
Regional Banks KRE, is also having an inside week. That makes total sense given the indecisive remarks by the Fed.
Yesterday, I was all excited about soft commodities.
Today, corn and soybeans held, but coffee, sugar, wheat and cocoa all turned red.
Nothing is easy.
Baby wrens depend on their mother to keep them alive.
The Economic Modern Family depends on good news to keep it alive.
Both look extremely vulnerable.
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S&P 500 (SPY) In the best shape of the four indices, the 50-DMA at 286.70 needs to clear. If gaps above tomorrow, would follow. If not, under 285.00 expect more selling.
Russell 2000 (IWM) 154.50 resistance. 151.40 support to hold
Dow (DIA) 257.50 now the pivotal number to watch
Nasdaq (QQQ) The 50-DMA is at 183.81 resistance to clear with immediate support at 180.00 to hold
KRE (Regional Banks) 54.20 resistance with 51.31 the 200-WMA
SMH (Semiconductors) 102 pivotal and 101.30 key support
IYT (Transportation) 189.32 failed deteriorating the phase to unconfirmed Distribution. 184.19 key support
IBB (Biotechnology) 103.25 the 200 WMA pivotal
XRT (Retail) We wonder how long XRT can hold 42.12.
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