Mish’s Daily: Caution, Yet Market Rotates from Growth to Value

6 months ago 767 views 8 min read

Michele “Mish” Schneider

Director of Trading and Education

MarketGauge.com

Mish’s Daily: Caution, Yet Market Rotates from Growth to Value

Written by Michele ‘Mish’ Schneider

For consistency’s sake, this is the 3^rd weekend in a row I am showing you the weekly charts of the Economic Modern Family.

3 weeks ago, it was our very own Granny Retail XRT that gave us the head’s up a correction was imminent.

Brother Biotechnology IBB flashed a warning that week as well.

By week 2, Granny confirmed, our Brother confirmed, followed by Granddad Russell 2000.

When key members of the Family break weekly channel support they had held for several to multiple weeks, the others typically follow.

And so, this past week, Transportation IYT and our Wondrous Sister Semiconductors SMH failed their weekly channel support, making the caution almost unanimous.

Almost.

One interesting holdout and in fact, reversal in that the price closed higher this past week than the week prior, is our good old Prodigal Son Regional Banks KRE.

We can speculate why-but the nature of this blog is price rules and fundamentals will catch up thereafter.

What we do know is KRE, a weak link to the chain up to this point, should the reversal confirm this coming week, could be our new superhero.

And of course, KRE is aptly named Prodigal Son-for this very reason. Then there is Bitcoin.

With the flush this past Friday early morning post missile strike news in Iran, followed by the ensuing pop in price, we can see that Bitcoin is holding the weekly channel support line that goes back now to early March.

This weekend marks the halving event where the block subsidy reward for miners gets reduced from 6.25 BTC to 3.125 BTC per block, potentially impacting the cryptocurrency’s price and mining operations.

Bitcoin halving’s occur automatically every 210,000 blocks or approximately every four years.

What we have learned these past weeks is that Bitcoin is susceptible to downturns in a high interest rate environment.

And we learned that in the current time of great geopolitical stress, Bitcoin sells off.

However, perhaps because of this weekend’s halving event, Bitcoin reigns as the strongest member of the Economic Modern Family.

Should Bitcoin hold 60,000 and rally through 72,000, pay attention.

Getting back to the rest of the Family, weekly channels may have failed in 5 of the 7 members, so now we turn our attention to weekly moving averages and phases.

Granny Retail closed the week below the 200-week moving average.

That puts the weekly phase back to recovery from accumulation. This must confirm however this coming week.

Hence, 71.00 becomes pivotal. Plus, if XRT fails to take back that level, we are looking at the 50-week moving average next at 66.45.

The same is true with the Russell 200. IWM closed right on its 200-WMA.

That tells us both IWM and XRT are key to watch this week for the next market moves.

Biotech is back in a bearish phase on the weekly charts.

While we are looking at some oversold conditions and support around current levels, unless IBB clears back over 129, we see weakness continuing.

While Semiconductors and Transportation are still above their weekly moving averages and in bullish phases, the fate of both most likely rests on whether Granny and Gramps can reverse course.

Circling back to Regional Banks KRE, we expect any upturn in the rest of the Family will only embolden this sector to rally more.

Any downturn in the Family from here, will bring KRE back to test both its weekly channel bottoms support and the 50-WMA at around 45.00.

Finally, sort of like the captain of the ship if we were to put the family on a cruise, is Junk Bonds or HYG.

Once HYG broke its weekly channel line support, that sealed the fate for a market correction.

Why?

High yield debt on poor performing companies is attractive when risk is ON.

Now, HYG is testing a new area of support or the 50-week moving average.

Should HYG bounce from here, along with what we see in Transportation, Regional Banks, the Russell 2000, and Semiconductors, all on support, most like good news for everyone! Should HYG fail the 50-WMA this coming week, caveat emptor.

For more detailed trading information about our blended models, tools, and trader education courses, contact Rob Quinn, our Chief Strategy Consultant, to learn more.

Traders World Fintech Awards

Get your copy of “Plant Your Money Tree: A Guide to Growing Your Wealth”

Grow Your Wealth Today and Plant Your Money Tree!

“I grew my money tree and so can you!”- Mish Schneider

Mish in the Media

Singapore Breakfast Bites Where are rates going? Mish talks about the higher for longer and why the FED could pivot on that 04-19-24

Neil Cavuto Coast to Coast Fox All About Netflix-Mish predicted that the stock peaked BEFORE the earnings report 04-18-24

Schwab Network Where the consumer will go next to spend money with Nicole Petallides 04-17-24

CMC Markets Technical trading-what how mish points out why the dollar could peak against the Yen 04-17-24

Stockpick.app Partial-sign up for the app and hear the analysis every week 04-15-24

Kitco News with Jeremy Szafron A clear explanation on why gold is up, inflation, Fed’s next moves and where things are going from here 04-13-24

CMC Markets Take a ride with Mish and she goes through commodities, indices and currencies and gives you a short-term game plan using long term bias 04-10-24

CNBC Asia Inflation is Coming Which bodes well for industrial and precious metals.04-10-24

Making Money With Charles Payne Mish talks about small and mid-cap stocks and why sticking to companies with strong balance sheets and earnings growth makes for best investments 04-02-24

CNBC Worldwide Exchange Tesla is one aspect of a much larger megatrend in EVs. Mish covers the advantages/disadvantages of the company and the space 04-02-24

Coming Up:

April 25 FOREX Trader’s Summit Pre Market with Dale Pinkert

April 26 Live Coaching for MG members

Weekly: Business First AM, CMC Markets, andnew to us-stockpick.app

ETF Summary

S&P 500 (SPY) 480 should be bottom line support but a move over 500 could give a bounce

Russell 2000 (IWM) 192 support

Dow (DIA) 372 the January low

Nasdaq (QQQ) 411 the January 6-month calendar range low and support

Regional banks (KRE) 45-50 range

Semiconductors (SMH) 204 now resistance with support at 175

Transportation (IYT) 67 pivotal with 65 bigger support