Mish’s Daily: Economic Modern Family Re-Set in July – Blueprint
Written by Michele ‘Mish’ Schneider
This will be the only Daily for this week.
A new one will be available July 24th.
As such, two key areas are in focus and both reliable in determining next moves in the market.
First, we have the charts of the Economic Modern Family (Russell 2000, Retail, Transportation, Biotech, Semiconductors, Regional Banks-we will leave Bitcoin out for now).
Secondly, we have the re-set of the 6-month July calendar range.
If we put both together, you will see how well aligned the price charts and the calendar range indicators are.
Of course, the rates, dollar, earnings, gold, oil, food, climate are all factors as well.
However, we want to leave you with a blueprint that is simple and can help you navigate where to put your money right now.
The first 4 charts are all in a weekly timeframe as per our book Plant Your Money Tree.
Verdict-Monday’s high will be the top of the calendar range. A move over 195 hard to argue with. A break under 190 suspect.
Retail XRT is in a Distribution phase and has to clear the 200-WMA and calendar range high at 67.42. A move under 63.40 would be weak. It is underperforming SPY and has a bearish divergence in momentum.
Transportation IYT is in a bullish phase. Last week it made its July Calendar range high. IYT outperforms SPY and momentum is weak compared to price. 245 is the key area to hold.
Semiconductors SMH has its July range high at 160.70. In a bullish phase, SMH has outperformed SPY since April. Momentum in Real Motion is in a bearish divergence to price. 147 is the 6-month calendar range low. A move below would not be healthy.
All four of these Family members looking a bit tired in momentum.
Biotechnology IBB is the second weakest Family member behind Regional Banks.
Just piercing the 50-WMA for an unconfirmed phase change to Recuperation, IBB has to clear 130 and then the 200-WMA at 135.30. Not surprising to see it well underperforming the SPY. Momentum in Real Motion has yet to catch up to the recent price action. The calendar range high, interestingly, is just over 130 or Monday’s high. We have eyes on this sector.
Regional Banks KRE are in a weekly bearish phase. A move over 45 would help and could also potentially give KRE a boost in leadership against the SPY. Momentum had a mean reversion back in mid-May. Nevertheless, the trip to the overhead 50 and 200-WMAs is far, yet perhaps not impossible.
As mentioned earlier the rates (FED on tap), dollar, earnings, gold, oil, food, and climate are all factors.
However, the most successful traders use the simplest formulas. Weekly charts, phase, leadership, momentum, and the July 6-month Calendar ranges should give you a statistical edge in this pivotal time.
Have a great week!
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Making Money with Charles Payne 07-10-23
Yahoo Finance 07-06-23
July 18-19 Business First AM
July 21 BNN Bloomberg
S&P 500 (SPY) 450 pivotal area 455 resistance 437 July low
Russell 2000 (IWM) 193 is the 23-month holy grail
Dow (DIA) 34,000 pivotal
Nasdaq (QQQ) Trouble if breaks 363
Regional banks (KRE) 42.00-44.00 range
Semiconductors (SMH) 150-160 range
Transportation (IYT) Under 250 some trouble
Biotechnology (IBB) 121-130 range
Retail (XRT) 65.00 key support right now