Mish’s Daily: Economic Modern Family – Warning Signs End of Week
Mish’s Daily: Economic Modern Family – Warning Signs End of Week
Written by Michele ‘Mish’ Schneider
Last Thursday night the Daily covered the weekly charts on the Economic Modern Family and why watching the one index and 5 sectors are best for spotting ahead of time, what comes next.
For the weekend, we are extending this topic with
- 1. A fresh look at the Russell 2000, Retail, Transportation, Biotechnology, Semiconductors, Regional Banks, and including what we left out before we now add:
- 2. Cryptocurrency-Bitcoin
- 3. The Fed speak done for now and yields rising, where do we see potential cracks?
- 4. Junk Bonds and yield spreads-what are they telling us?
- 5. Commodities departing from the classic anchors: high yields and a strong dollar. What???
Looking at the 6 weekly charts, I updated the horizontal, parallel lines to show that at these higher levels, all the Family are rangebound when you study the patterns from late February to now.
I also added Bitcoin weekly chart. The rectangle represents its recent trading range between 63,000 and 70,000.
Depending on how the consolidation levels break (up and down) it is easier to then trade by following the money.
As for the updated ranges:
Granddad Russell 2000 IWM still has a range of 200-212.
Sister Semiconductors consolidates between 220 and 240.
Transportation IYT trades between 67-71. The tightest range in the Family.
Should that break out, consider it a good sign for the US economy and evidence of a “no” landing.
But IBB, XRT, and KRE are more concerning.
Biotechnology broke the recent trading range under 134.
Granny Retail XRT sits right on the bottom of the consolidation range at around 74.50.
Regional Banks KRE, while it is still above the bottom of the range, looks as if it convincingly rejected clearing the top of the range.
Adding this chart:
What we see is that foreign investments into gold have increased while foreign holding of US treasuries fall.
With gold making new highs in the face of higher yields and strong dollar, one must imagine why?
Then there’s this:
Rangebound junk bonds HYG weekly chart also shows us that under 76.50 risk begins to show more risk off.
Of course, over 77.72, the picture looks much better.
In the last week, high yields credit spreads between 3-7 years bonds and junk bonds widened out, but not in any major way at this time.
However, should that spread widen further, along with what we are seeing it in Regional Banks, Retail, and the underperformance of the small caps, it could suggest stress in the credit markets.
That would also explain the move in gold.
Regardless, consolidation is one of our favorite chart patterns, especially when prices are consolidating at new highs or lows.
The direction the price follows, up or down out of the consolidation can lead to explosive moves.
For more detailed trading information about our blended models, tools, and trader education courses, contact Rob Quinn, our Chief Strategy Consultant, to learn more.
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Mish in the Media
The Final Bar with StockchartsTV Mish covers uranium, solar energy and forex with Dave Keller 04-02-24
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
Neil Cavuto Fox Business Mish and Frances talk rising inflation, keeping current rates, sentencing SBF and trying to stop a train with talk 03-29-24
Business First AM Listen why Junk Bonds, Microsoft, Retail and Natural Gas all have something to say 04-02-24
Schwab Network Mish goes through why it may not matter as commodities are picking up regardless. 03-28-24
Stockpick.app Mish takes you through retail, gold miners, DJT and Netflix 04-01-24
Business First AM Mish tells you why she likes gold miners and feels they could run more 03-28-24
CNA Asia First Where will money rotate after the FOMC-Mish talks to Singapore 03-20-24
The Morning Run BFM 89.9 Malaysia Business radio What’s next for interest rates, Fed policy and why we need to watch long bonds 03-20-24
Business First AM Mish checks the charts on commodity prices 03-20-24
Schwab with Nicole Petallides –Mish covers her predictions and why solar should be watched along with commodities and long bonds 03-15-24
Real Vision Daily Briefing Mish goes through all the factors to watch for the stocks and commodities next big moves 03-18-24
Financial Sense Jim Pupluva Mish and Jim talk about the signs of inflation and recession-both are still on the table 03-15-24
Business First AM Identifying Warning Signs and why Alibaba 03-13-24
Coming Up:
April 3 Final Bar Stockcharts TV
April 9 Wealth365
Weekly: Business First AM, CMC Markets, andnew to us-stockpick.app
ETF Summary
S&P 500 (SPY) 520 now resistance
Russell 2000 (IWM) 201 support
Dow (DIA) 385 support 400 resistance
Nasdaq (QQQ) 440 the pivotal area
Regional banks (KRE) 45-50 range
Semiconductors (SMH) 223 support near term
Transportation (IYT) 68 area support
Biotechnology (IBB) 135 resistance
Retail (XRT) 75 pivotal
iShares iBoxx Hi Yd Cor Bond ETF (HYG) 76.50 support and back over 77 better
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