May 25, 2021
Mish's Daily
By Mish Schneider
Written by Forrest Crist-Ruiz
For the 3rd time, the small-cap index Russell 2000 (IWM) has failed to clear its 50-Day moving average.
It is the last of the 4 major indices to lag as Monday the Nasdaq 100 (QQQ) cleared and now for a second day held over its 50-DMA.
This confirmed its re-entrance into a bullish phase.
Although the other indices including the S&P 500 (SPY) and the Dow Jones (DIA) are in bullish phases, this does not take away the importance IWM plays in the bigger picture.
Representing companies between 300 million to 2 billion, the small-cap index is a vital piece of the market and holds a fair amount of weight in the markets’ price action.
Having said that, IWM has yet to break back down to recent lows and could make a 4th attempt to clear through resistance around $222.14.
If the contrary takes place and we see a move lower other important sectors to watch include Regional Banking (KRE), Transportation (IYT) Biotech (IBB), and Retail (XRT).
Each sector is starting to look heavy and could take IWMs lead.
However, Thursday the Jobless Claims, GDP, and Durable Goods Orders reports will be released at 8:30 AM ET.
If positive, this could be an uplifting event for the market and might be a catalyst for IWMs' break over resistance at $222.
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ETF Summary
S&P 500 (SPY) Resistance 422.82
Russell 2000 (IWM) Support 215. Resistance 222.14.
Dow (DIA) Needs to clear 345.
Nasdaq (QQQ) Confirmed bullish phase with close over 328.66 the 50-DMA.
KRE (Regional Banks) 68.21 support.
SMH (Semiconductors) 242.25 needs to hold as new support.
IYT (Transportation) 267.44 support.
IBB (Biotechnology) 147 support.
XRT (Retail) struggling to hold over 91.
Volatility Index (VXX) 36 next support.
Junk Bonds (JNK) Resistance 109.17 108.65 support.
XLU (Utilities) 65.15 support the 50-DMA.
SLV (Silver) Doji day. 24.92 next support.
VBK (Small Cap Growth ETF) 276.91 resistance.
UGA (US Gas Fund) 34.68 resistance area.
TLT (iShares 20+ Year Treasuries) Confirmed recovery phase with second close over the 50-DMA at 137.73.
USD (Dollar) Watching to hold 89.68.
MJ (Alternative Harvest ETF) Holding over the 10-DMA. Needs to clear 20.48 next.
LIT (Lithium) 64.25 resistance.
XOP (Oil and Gas Exploration) minor support the 10-DMA at 19.95.
DBA (Agriculture) 18.17 support. Head and shoulders chart pattern
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