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What Does the Economic Modern Family Say Now?

November 10, 2024

Mish's Daily

By Mish Schneider

NOTE: Weekly charts except for TLT and BTCUSD, both Daily charts

Considering where the Economic Modern Family was just a few weeks ago, clearly euphoria has spread since the election.

There are though, key levels to watch, not to mention a couple of Family members that look good but not quite as euphoric as the Dow, S&P 500 and NASDAQ behaved since last Tuesday.

The Fed lowered rates as well this week.

We will look at the long bonds and what might have been a key reversal. What does that mean for the Family?

Beginning with what I still consider to be the Empress if you will, of everything going forward, Granny Retail XRT looks poised.

Nonetheless, we have learned to wait for the evidence rather than anticipate and act too fast.

The 10-month consolidation and trading range breaks out over 80.00.

XRT did close on a new weekly high this past week, surpassing the closing level the last week of March 2024.

And that was the top, hence patience still please.

But, with a rate drop, new administration, the promise of “fixing” the economy, it is the consumer that must buy (literally and figuratively), into the promises.

(Incidentally, I suggest you listen to my recent media appearances-links below- as I talk a lot about the consumer, rates, tariffs, tax cuts, inflation, stagflation, reshoring, etc.)

So, for now, XRT over 80 is my main focus.

As for Granddad Russell 2000 IWM, the look is a bit different. On new 2024 highs, IWM is not quite clear of the all-time high made in 2021.

However, I am less concerned about that and way more concerned about XRT and what that does in the coming days and weeks.

Biotechnology IBB I still find intriguing.

With a new weekly close high for 2024 (and highest close since 2022), IBB looks great after 4 and ½ months of consolidating.

Medical Devices IHI, also looks amazing.

Sister Semiconductors SMH is strong and never really weakened to any disturbing point.

Even so, 260 remains the level to clear and the whole chip space is hardly my first choice, or even 2^nd or 3^rd as far as the next member of the Family to rally.

Before we finish the rest of the Family, a word on long bonds.

After the September rate cut, the long bonds reacted initially well, and then proceeded to sell off as yields rose.

Now, after this week’s rate cut, yields softened again and the TLT left a reversal bottoming pattern.

While the Real Motion momentum is nothing to write home about and the performance versus the benchmark remains risk on for the market, should yields soften more, it could be helpful to XRT, IWM and IBB.

So, keep watching.

As far as the rest of the Family…

As we have predicted, after the 4-year halving, Bitcoin rallies late October.

And so, it has. Is it because of Trump?

That didn’t hurt. Yet I believed this would happen regardless.

If 74k holds, we are looking at 90k next target.

Circling back to the next member, Transportation IYT, told us before anyone else that this rally was coming when the price plowed above 71.00.

The good ole Dow theory.

So now, IYT is on new all-time highs and while other Family members have yet to get there, we cannot be bearish with a strong transportation sector.

Finally, my favorite character in the Family, Regional Banks KRE or our Prodigal Son.

I purposely condensed the chart to show you the action from March 2023, when KRE crashed.

KRE is back to the scene of the crime at the 65 level.

Above there, we see 75 area as the next resistance.

Now, can the whole kit and kaboodle fall apart?

Of course.

But there will be signs. Here are the top 5

An island top or huge reversal day on high volume in any of the outperformers
One sector (most likely Granny) will fail to take out the range high and reverse.
Yields scream higher again
CPI (this coming week) comes in way hotter than expected
Full scale war-unlikely but has to be mentioned

Nevertheless, for now, all systems are go and you have a blueprint to follow for this week.

Educational purposes only, not official trading advice.

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-Want to see more? All clips here

F.A.C.E with Dale Pinkert Mish said XRT & IWM have important Breakouts just above current levels 11-08-24

Business First Market All Fired Up After the Election 11-07-24

CNA First Mish explains the challenges the Federal Reserve could face to its independence and what the US economy could look like under a second Trump administration. 11-08-24

Podcast Breakfast in Singapore The Trump Presidency-what should we look for? 11-06-24

Benzinga Pre-Market Prep Mish and Benzinga talk China, commodities, the economy, rates and the election 10-28-24

Business First AM The new thin economy 10-23-24

Geoff and Mish Podcast Geoff and Mish Walk you through how phase changes create great trading opportunities in any market condition 10-22-24

ProInvestor Insights The Economic Modern Family is Teaching Investors Patience IS a Virtue! 10-21-24

Business First AM Mish goes shopping and tells you how to pick a bottoming stock 10-21-24

Coming Up:

November 12 WealthWise with Jordan Kimmel

November 18 BNN Bloomberg

November 21 BFM Radio Malaysia

December 5-7, 2024 Money Show Master Class