Mish’s Daily: Watching Granny Retail and Granddad Russell 2000

2 weeks ago 126 views 6 min read

Michele “Mish” Schneider

Director of Trading and Education

MarketGauge.com

Mish’s Daily: Watching Granny Retail and Granddad Russell 2000

Written by Michele ‘Mish’ Schneider

Video here

Resiliency Is the Headline

Thursday’s market action can be summed up in one word: resiliency.

Granddad Russell 2000, represented by IWM, held its 200-day moving average, showing surprising strength in small caps.

This matters.

Small caps are often a barometer for:

* Domestic growth
* Risk appetite
* Economic confidence

Holding the 200-day moving average suggests that, despite uncertainty, the market is not ready to roll over just yet.

Transportation: A Growing Mystery

Transportation IYT, however, is telling a more puzzling story.

Despite:

* Rising oil prices
* Elevated yields

The transportation sector (IYT) continues to hold its ground.

Historically, higher energy costs tend to pressure this sector.
Yet for now, transportation is not confirming weakness.

This divergence raises a key question:

➡ Is the market more resilient than expected?
➡ Or has the impact of higher costs simply not been felt yet?

The Bond Market: Still Holding Together

Meanwhile, the bond market remains steady.

Even with yields at elevated levels, the long bond has not broken down.

This underlying stability is important because:

* Disorder in bonds often spills into equities
* Stability in bonds can support risk assets

For now, bonds are not signaling panic. Which brings us to the most important player in this setup.

Granny Retail: Testing a Critical Floor

Granny Retail represented by XRT is approaching a key technical level.

The chart is now showing a potential triple bottom formation:

* May-June 2025
* November 2025
* March 2026

This is not just a pattern; it is a test of consumer resilience.

Retail reflects behavior:

* Spending habits
* Confidence
* Economic participation

And right now, that behavior is sitting at a decision point.

The key level to watch is 77.

If this level holds:

* The market may be anticipating that current geopolitical tensions can be navigated
* Risk assets could find support
* A more constructive outlook could develop

Markets are forward-looking.

Holding support suggests confidence in future stability.

The Risk Scenario

But if 77 breaks:

* The triple bottom fails
* Consumer weakness becomes more pronounced
* The risk of a deeper correction increases significantly

This would shift the tone from resilience to caution — quickly.

Actionable Framework

Here’s how to approach it:

Above 77 (and holding)
→ Constructive
→ Watch for broader market support
Below 77
→ Defensive posture
→ Increased downside risk

And most importantly:

➡ Watch the relationship between Granny Retail and Granddad Russell

Because together, they tell the story of:

* The consumer
* And economic growth

Bottom Line

The market is holding together — for now.

Small caps are resilient.
Transportation is puzzling.
Bonds are stable. But the real decision lies with the consumer.

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That is for financial literacy.

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They do, however, overlap.

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Educational purposes only, not official trading advice.

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