Market – Is That the Best You Got?

Jerome Powell’s talking points today:

  • “Millions” of people will not return to work for some time because of the aftershocks to businesses from the health scare.
  • Fed has not committed to the hotly debated concept of yield curve control to lower interest rates further.
  • Struck a cautious tone on the economic recovery underway, saying it’s the “beginning” of a bounce-back (not a V-shaped recovery).
  • Low interest rates and bond buying will be the norm for the foreseeable future.

NASDAQ did not fill the gap to 244.51 or the island bottom gap. Whether it will soon remains to be seen. But once again, with Powell’s more realistic tone, not that much changed with the Economic Modern Family.

The Russell 2000 (IWM) still remains below both the 50 and 200-week moving averages and is in a weekly bearish phase. The black line is a line-in-the-sand pivotal point.

Granny Retail (XRT) rose above the 50-WMA, but remains under the 200-WMA and is in a weekly recuperation phase.

Biotechnology (IBB) holds the pivotal black line channel. IBB is in a bullish phase. However, IBB has not taken real leadership as one might expect it to.

Regional Banks (KRE) tried to rally but still looks weak. Bearish phase, and a move back under 40.00 not so good.

Transportation (IYT) also sits in a weekly bearish phase, and is just above the pivotal black line.

Semiconductors (SMH) remains inside last week’s trading range. In fact, it has 2 inside weeks. That makes it pretty simple – under 139.75 trouble, over 155 off she goes. And yes, SMH is in a bullish phase.

Bottom line: 3 of the 6 members are in bearish weekly phases. Retail improved, if it confirms, to a recuperation phase.

The “inside” of the market is not impressive. Should QQQs fail the 240 level, that would be a good reason to look at volatility. It is also possible that QQQ gaps open tomorrow over 244.51. That will bring buyers there.

Nevertheless, will the Modern Family follow the Fed’s never-ending stimulus money promise or Powell himself, who speaks from the other side of his mouth spewing caution?

  • S&P 500 (SPY): 312.50 pivotal. 320 big resistance, 302 support
  • Russell 2000 (IWM): 147.20 resistance with support at 142
  • Dow (DIA): A move over 263.35 clears the 200-DMA – barely made it, needs to confirm
  • Nasdaq (QQQ): Island top unless trades to 244.51.
  • KRE (Regional Banks): 41.45 resistance to clear
  • SMH (Semiconductors): Inside week – so there’s that. 139.78 last week’s low – 155 resistance
  • IYT (Transportation): 158 support, 168 resistance
  • IBB (Biotechnology): I give it a T for trying
  • XRT (Retail): 200-DMA 40.50 support to hold, 43.50 resistance
  • Volatility Index (VXX): 34.50 support, through 38.50 better