Mish’s Daily: Regional Banks and the 23-Month Moving Average
Mish’s Daily: Regional Banks and the 23-Month Moving Average
Written by Michele ‘Mish’ Schneider
Yesterday I wrote about Alibaba and the 23-month moving average ahead of its earnings report.
Now that it did report, to repeat,
“The monthly chart is one of my favorites to look at, especially when one draws in the 23- and 80-month moving averages.
BABA ran right to the 23-month MA ahead of the earnings report.
What could that mean?
- 1. If the price clears, then we will assume that the stock has more room to run with a now 2-year business cycle expansion.
- 2. If the stock does indeed gap higher, then we are looking for a move to around $100.
- 3. If the stock comes in lower, we will use a support level of $77-80 to gauge the company’s health.”
Clearly choice 3 is what we are watching to see if that area holds or not.
Now, we have a similar situation with one of our Economic Modern Family members, our Prodigal Son, Regional Banks KRE.
To review, KRE was the first sector in the Family to signal a warning in March 2023 that something was amiss.
As other sectors were running to new highs, KRE did not clear the 23-month moving average, but also broke below the 80-monthly MA, setting the stage for a big correction on news of bank failures.
Since then, KRE has not been able to return back over either of these key monthly moving averages.
Til now???
The 23-month MA sits at $51.30.
However, we must note that on a shorter timeframe, KRE is trading at its highest levels since January 2024.
Therefore, we do have momentum.
Hence, while KRE has been in contraction really since 2022, it now stands a chance of going into expansion.
We are not there yet, but keep your eyes on
- 1. KRE holding $49-50
- 2. KRE closing the month over the 23-month MA and holding there
Mish appeared with this afternoon with Dave Keller of Stockcharts on Final Bar-have a listen
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Mish in the Media
Final Bar with Dave Keller 05-14-23
Business First AM Mish explains why these meme moves parallel the market peak in 2022 plus gives one stock pick 05-14-24
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Stockpick.app Weekly video Mish covers the economic modern family, natural gas and gold 05-06-24
Financial Sense with Jim Pupluva Mish and Jim talk about the cost of AI on the already short supply of many raw materials 05-04-24
Benzinga Market Prep Mish is there for the jobs report and gives you an action plan Starts at minute 27:49 05-03-24
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ETF Summary
S&P 500 (SPY) Near all time highs over 524
Russell 2000 (IWM) 202 support now with 210.80 ATHs
Dow (DIA) 387 support and 400 resistance
Nasdaq (QQQ) 437 key support 449.34 ATHs
Regional banks (KRE) Compelling but not there yet
Semiconductors (SMH) 230.05 ATHs
Transportation (IYT) 64 support 67 resistance -still relatively weak
Biotechnology (IBB) 135 cleared next resistance 137
Retail (XRT) 80.10 high today is the new 2024 high with 75 key support
iShares iBoxx Hi Yd Cor Bond ETF (HYG) Back over the 50-DMA now much hold
20240515