May 19, 2019
By Mish Schneider
One of the greatest and funkiest songs ever is “Family Affair” by Sly and the Family Stone. https://www.youtube.com/watch?v=MbT_ask1Cco
“One child grows up to be somebody that just loves to learn, and another child grows to be somebody you’d just love to burn.”
You can only imagine my delight in seeing this low rider with the perfect area rug.
As far as the Economic Modern Family, this sure has been one that proves mud could be thicker than blood.
One child, Sister Semiconductors SMH, loves to learn, or at least holds the weekly bullish phase.
Another child, Granny Retail XRT, (ok, not a child, but whatever), we’d love to burn.
That sector is in a bearish phase on the daily and a distribution phase on the weekly charts.
As for the rest of the Family, they can be described by another appropriate lyric from the song…
“You can't cry, 'cause you'll look broke down
But you're cryin' anyway 'cause you're all broke down!”
The weekly charts exemplify the current Family dilemma.
Top left is Transportation IYT. An integral part of the Family and a representation of the demand side, IYT hovers on the 50-week MA (blue line). (It actually closed below it.)
What does that mean? In spite of the “talks” on an infrastructure deal, demand is slipping.
In the middle, is the child who loves to learn, SMH. But for how long?
SMH has fallen from the highs and on the daily chart is in a caution phase. We will see what happens when it hits 102.17 or the 50-WMA.
Far right is the Russell 2000. IWM has confirmed a distribution on the daily chart with a caution phase on the weekly. IWM shows the supply side is weakening.
Bottom left is our child we’d love to burn, XRT. Or more accuately, the child who is burning us. XRT is in a bearish daily phase and in a distribution weekly phase.
Next is Biotechnology IBB. IBB, with very little to do with tariffs, is hanging on to the 200-WMA (green line) for dear life.
Far right bottom is Regional Banks KRE. Still wedged between the 50 and 200-WMAs, the bigger point is the daily bearish phase and weekly caution phase.
Add insult to injury, the S&P 500 and NASDAQ 100 went into unconfirmed caution phases.
So, as we start next week remember this,
“Nobody wants to blow
Nobody wants to be left out
You can't leave, 'cause your heart is there
But you can't stay, 'cause you been somewhere else!
It’s a Family Affair…”
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S&P 500 (SPY) Back to an unconfirmed caution phase. 286.60 is the 50-DMA to clear or not. Support 277.15
Russell 2000 (IWM) 154.50 resistance. 151.50 support to hold
Dow (DIA) 258.50 resistance with 254.50 first area of support.
Nasdaq (QQQ) The 50-DMA is at 183.49 resistance to clear and 175 the major underlying support.
KRE (Regional Banks) 54.20 resistance with this in a confirmed bearish phase. 51.31 the 200-WMA
SMH (Semiconductors) Can see this testing 102.20 the 50-WMA. Resistance at 107.35
IYT (Transportation) Unconfirmed Distribution phase with 189.32 resistance and 185 next support
IBB (Biotechnology) 105 resistance, 103.36 the 200 WMA that must hold
XRT (Retail) Under 42.12 expect more weakness.