What Market Sectors are Waiting to Breakdance?

January 13, 2020

Mish's Daily

By Mish Schneider

blankBreakdancing mainly consists of four kinds of movement: toprock, downrock, power moves and freezes.

Toprock movement is done from a standing position.

Downrock movement is done from the floor.

Power moves rely on speed, momentum and acrobatics.

Freeze movement is no movement at all. All motion is halted.

With so many sectors exploding to the upside already, what is left to toprock, downrock, power or freeze?

The sector that could toprock as it is already in a standing position is Regional Banks KRE.

We start off the week trading within the trading range of last week. With bank earnings on tap, I’d watch KRE to take out 57.75.

If downrock is movement done from the floor, that would be Brick and Mortar Retail XRT.

After last week’s doji candle (the opening and closing price for the week was the same (45.08-45.10), this week, to go from a downrock to an uprock, XRT has to clear/close over 45.50 as a start.

Transportation IYT is the sector, should the market hold, most likely to power move.

Also starting out with an inside trading week, through 198.45 and after weeks of consolidation above 190.00, IYT could gain speed and momentum.

Freeze movement or no movement at all, could belong to Biotechnology IBB.

As the first of the Economic Modern Family members to breakout back in early October, it is possible that this week, IBB halts from selling off, but also continues to trade as if frozen at current levels.

With the Vice Premier of China in the US ahead of the planned Phase One Trade Deal signing, that could be just the breakbeat these sectors need to breakdance.

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S&P 500 (SPY) Closed out on a new all-time high. 324.10 support

Russell 2000 (IWM) 165.35 pivotal

Dow (DIA) Inside day. 287.15 support to hold

Nasdaq (QQQ) Closed out on a new all-time high. 216.15 support to hold

KRE (Regional Banks) Holding the 50 DMA right around 57.00

SMH (Semiconductors) Inside day. 142.95 support to hold

IYT (Transportation) 195 pivotal support 200 key resistance.

IBB (Biotechnology) 121.91 resistance and 115.50 support

XRT (Retail) 45.50-46.00 pivotal resistance. 44.78 the 50-DMA

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