I hear a symphony..
Only there are some discordant notes.
On the one side of the orchestra, we have NASDAQ FAANG and Tech building to a crescendo. On the other side, we have the Russell 2000, Retail Regional Banks and Granny Retail sounding more like a rat-a-tat-tat, then quiet. Therefore, while the audience focuses on the crescendo, some of us are watching the sporadic drumming of the Family more closely.
Retail (XRT) sits above the 50-week moving average but below the 200-week moving average. Clearly, to help her drum louder, XRT needs to clear that 200-WMA.
The Russell 2000 (IWM) is under both the 50- and 200-WMAs. Maybe a good beating with a drumstick will wake him up.
Biotechnology (IBB) has to hold the recent breakout. We would not want to see it fail to follow through after looking so promising.
Regional Banks (KRE) can barely brush the cymbal. This is where all the stress of the economy is seen.
Transportation (IYT) is not exactly creating any good vibrations either. It needs to.
Meanwhile, our sister Semiconductors (SMH) plays with the loudest part of the orchestra. We might even say that she is conducting!
Here’s a 2-minute rundown on the regional banks I gave on June 22, 2020:
- S&P 500 (SPY): Inside day. 313 pivotal. 320 big resistance, 302 support
- Russell 2000 (IWM): 147.20 resistance with support at 140-141
- Dow (DIA): 260 support, 263 resistance
- Nasdaq (QQQ): New all-time high, making 247.82 (the last high) a pivotal point
- KRE (Regional Banks): 41.65 resistance, 40.00 pivotal; 37.00 major support
- SMH (Semiconductors): Inside weeks – 139.78 last week’s low, 155 resistance
- IYT (Transportation): 158 support, 168 resistance
- IBB (Biotechnology): 136 support
- XRT (Retail): 200-DMA 40.50 support to hold; 43.50 resistance
- Volatility Index (VXX): 34.50-38.50 range
- Junk Bonds (JNK), LQD (iShs iBoxx High-Yield Bonds): Sitting on support
Mish Schneider
MarketGauge.com
Director of Trading Research and Education