January 28, 2019
By Mish Schneider
Over the weekend, we wrote about the inside week price action in several key Economic Modern Family instruments.
The Russell 2000 IWM, along with Transportation IYT and Retail XRT had classic inside weeks.
So did the S&P 500 SPY, NASDAQ 100 QQQ and the Dow DIA.
With the inside weeks in IWM, SPY, QQQ, DIA, IYT, and XRT, we have a guideline.
The way the range breaks (up or down) should prove very useful for trading in the right direction.
Monday began offering little in the way of clues.
All the aforementioned instruments, although red, maintained their price action inside last week’s trading range.
That keeps the bulls in the bicycle seat.
Yet, these biking Vikings steer (pun intended) with sinister handlebars.
Last week, Biotechnology IBB did not have an inside week. However, it did not close above the 50-week moving average.
Today, IBB tested key support at 106.65. A move below, should yield further weakness.
Regional Banks KRE did not have an inside week either.
KRE closed green and with a price above the highs of the last two weeks.
Perhaps this is significant as money rotates here.
However, as the Prodigal Son, we’ve learned not to get too excited if it’s the only green sector among the Family.
The Semiconductor SMH sector failed to clear the resistance at 97. Now, it must hold the support level around 93.85.
Retail XRT, did better than SMH and IBB. XRT now needs to clear the 200-WMA at 44.73.
Hence, there you have it.
The Bulls steer.
The steer claws at the bulls.
And, our Viking rider, whom we can call Erik the Red-once considered a successful trader and captain-rides into untamed territory.
S&P 500 (SPY)260.68 the low to hold with 266.70 the point to clear.
Russell 2000 (IWM) 147.54-147.92 is the range to clear. 143.46 the low to hold
Dow (DIA) 242.35 low to hold and 248.55 high to clear
Nasdaq (QQQ) Must clear over 165.65 and hold 160.32
KRE (Regional Banks) 53.00 nearest support level to hold. 55 major resistance
SMH (Semiconductors) 97.20 big resistance. 93.50 pivotal and 92 support
IYT (Transportation) 173.23 support and 179.15 resistance
IBB (Biotechnology) 110 resistance with 106.65 support
XRT (Retail) 44.75 the weekly resistance. 43.70 support to hold
Every day you'll be prepared to trade with: