Key Support Levels That Need to Hold

Although every member of the Economic Modern Family closed down on Monday, none broke their major support areas. Here is a quick rundown of where each member’s closest support level is.

First, we have the Russell 2000 (IWM), with support from the low of its current range at $218.83. This low was created on 4/13.

The Transportation sector (IYT) has support at $255.39 from 3/22. The prior high now serves as a minor support level.

Retail (XRT), Semiconductors (SMH), and Regional Banks (KRE) all have support from their 50-day moving averages: XRT at $86.29, SMH at $242.18 and KRE at $66.07. One thing to note is how the banking and retail sectors have not closed underneath their 50-DMAs this year, which makes the price level of their moving averages more meaningful.

The Biotech sector (IBB) has tested support from the 200-DMA multiple times, giving it a stronger support level at 145.94.

These 5 key sectors and 1 Index create the Economic Modern Family, which was created to boil down the overall market picture. Additionally, by keeping track of their pivotal price levels, we can better time our trade entries and identify which sectors are leading or causing strain on the market. 

With the potential of coming stagflation for the rest of 2021 and 2022, Mish goes through all of the different commodities and tells you what to trade, how and when in the latest edition of StockCharts TV’s Mish’s Market Minute.

ETF Summary

  • S&P 500 (SPY): Support 411.70 the 10-DMA
  • Russell 2000 (IWM): 218.83 support. Resistance 226.69
  • Dow (DIA): 337.67 support the 10-DMA
  • Nasdaq (QQQ): 338.19 needs to hold as support
  • KRE (Regional Banks): Support 66.07 the 50-DMA. Resistance 68.35
  • SMH (Semiconductors): Support 242.18
  • IYT (Transportation) 255.39 support.
  • IBB (Biotechnology) 145.94 support. Resistance 156
  • XRT (Retail) Needs to clear 93, then 96.27

Forrest Crist-Ruiz

Assistant Director of Trading Research and Education