Mish’s Daily: The Economic Modern Family & the MOST IMPORTANT Data Ever
Written by Michele ‘Mish’ Schneider
Admittedly, numbers are sexy.
Think about how much focus all the economic stats that came out this past week got on all media.
Each one was the defining one for the markets and economy according to the talking heads.
CPI and PPI-softer-that’s it, inflation is over.
Retail Sales-softer-that’s it, here comes recession.
FOMC-hawkish sort of-a bit unclear-that’s it, FED will hike again, then pause.
Meanwhile, here are the weekly charts of the Economic Modern Family
Bitcoin is our newest member so let’s look at that too.
What do you see?
Anything stand out as defining?
Each weekly chart has a 50-week moving average in blue. And a 200-week moving average in green.
I have written a lot about the 23-month MA. I do also like the weekly MAs. They are widely looked at by institutional investors and give us a bit of a quicker time frame than a 2- or 6-year business cycle.
Beginning with Granny Retail XRT, she ended the week near the lows of the week before and well above the March lows. Under 58, I’d get nervous about the consumer end.
At this point though, all we did was test the price support pre-inflation and retail numbers. Defining? Nah-jury out.
Next is Granddad Russell 2000 (IWM). We can say the same about Gramps as we did about Granny. Is that why they are the Patriarch and Matriarch of the U.S. Economy?
Next is Big Brother Biotechnology (IBB). Not only did IBB close higher on the week, but he is right in the middle of the 2 moving averages. Defining? Nah-jury out.
Looking at our Prodigal Son Regional Banks (KRE), I even thought the bank earnings would give us some inkling of the next move. But no. Instead, KRE closed with an inverted doji candle, meaning, anything can happen next as price takes a giant pause above last week’s lows.
Moving over to Transportation (IYT), that closed over the 50-week moving average and in a bullish phase. We like that. When demand picks up, we take note.
Sister Semiconductors (SMH), look strong. Like her grandparents, she is closing near the lows of this past week and the week prior. However, unlike her Granny and Gramps, she remains the leader of the Family and in a bull phase.
Finally, Bitcoin (BTC), defies all the talking heads. While Sister Semiconductors is our Wonder Woman, Bitcoin is our Rebel with a Cause. BTC closed the week at new yearly highs!
What we love about the Family is how their interrelationships, as well as their relationships to the overall macro, tell a story.
The story right now goes back to last weekend’s commentary. A Picasso cubist painting: or a market with multiple perspectives that have distorted realities and perceptions. And most importantly, a really good time to know how to read charts.
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Mish in the Media
CMC Markets 04-12-23
Yahoo Finance 04-12-23
Rosanna RoPodcast 04-07-23
Business First AM 04-11-23
Business First AM 04-05-23
April 19 Closing Bell Cheddar TV
April 20 Benzinga Pre-Market Prep
April 24-26 Mish at The Money Show in Las Vegas-2 presentations and a book giveaway
May 2-5 StockChartsTV Market Outlook
S&P 500 (SPY) Tight range to watch this week 412-415
Russell 2000 (IWM) 170 support- 180 resistance
Dow (DIA) Peeking over the 23-month MA 336-impressive if holds
Nasdaq (QQQ) 312 support over 320 better
Regional banks (KRE) 41.28 March 24 low held and now has to clear 44
Semiconductors (SMH) 258 resistance with support at 250
Transportation (IYT) 219-228 the wider range to watch
Biotechnology (IBB) 130 major pivotal area-135 resistance
Retail (XRT) 58- 64 trading range to break one way or another