March 21, 2019
By Mish Schneider
The focus of yesterday’s Daily was Semiconductors SMH.
And keeping your focus on SMH turned out to be pretty good advice.
SMH opened higher (above the pivotal 106.42) and continued its ascent to the highest level it has been since June 2018.
Sister Semiconductor’s Wonder Woman status motivated a few other members of the Family, which is exactly what we thought could happen.
As mentioned last night, “IBB (Biotechnology) and SMH are the two most highly speculated members of the Modern Family. Hence, no surprise that the public interpretation is that the Fed can keep the money pumping indefinitely, which will in turn keep the economy and market in good shape.”
However, not everyone in the Family rallied today.
While Biotechnology held onto its Bullish phase on the weekly, it fell mainly due to a crash in Biogen BIIB.
Regional Banks nearly tested the 200-week moving average and closed weak. Seems banks are not too fond of the Fed’s dovish stance.
For the rally in the indices though, I guess we should thank Powell as we once thanked Yellen for the artificially flavored green Jell-o.
Therefore, I keep showing you the weekly charts in the Economic Modern Family.
Top left is Regional Banks KRE. Keep in mind the 200-WMA (green) is not too far from current levels. KRE led us down in October and could easily do so again.
Retail XRT has been around way too long to swallow the Jell-o whole. Hovering on the 200-WMA, if it closes the week under 44.55, warning.
Transportation IYT is at a precipice-unless it closes the week over 185.70, that big red bar from 2 weeks ago still looms as caution.
Bottom left is the Russell 2000. Stronger than IYT, it too has not really done much since the big red bar two weeks ago. Until it clears the 50-WMA (blue) I see it as enjoying the Jell-o, yet not necessarily digesting it well.
Biotechnology IBB, although above its 50-WMA, is also trading within the range of the red bar two weeks ago. The levels are clear-must hold 110.34 and clear 116.25.
Finally, Sister Semi’s. Remember what happened before each sell off in March 2018, June 2018, and September 2019? That’s right-new swing highs, leading ahead of everyone else, only to fall hard with the heavier influences.
S&P 500 (SPY) Yet another new swing high. 280.70 support to hold
Russell 2000 (IWM) 154 pivotal support and over 157.25 a miracle.
Dow (DIA) 257 support and 260 resistance
Nasdaq (QQQ) New swing high today at 182.83. Must hold 181 on a closing basis or will look like a reversal top.
KRE (Regional Banks) Confirmed Bearish Phase-back in October, this one crashed first. Now, a move under 51 not a good sign
SMH (Semiconductors) Why we wait a second day for confirmation on tops and bottom. 110 super pivotal and a close under 108 not good
IYT (Transportation) Cleared back over the 50-DMA. However, unless this clears/closes over 185.70, still weak
IBB (Biotechnology) 115 resistance and 110.40 the must hold support
XRT (Retail) All about the 200-WMA and 44.55 pivotal