February 12, 2019
By Mish Schneider
The laggard of the Modern Family throughout this rally has been Retail (XRT), which mainly represents the brick and mortar stores.
While the rest of the Family (Russell 2000, Biotech, Transports, Regional Banks, and Semiconductors) have been trading over their 200-WMA (week moving average), XRT has not.
Plus, honorary mention goes to Semiconductors SMH, now above its 50-WMA, provided it holds above 101.
So, when XRT finally cleared the 200-WMA at 44.66, she put her bear totem on the shelf.
Will we see Granny’s green yarn turn into a green blanket? Or will her bear totem come flying off the shelf and knock her down?
Before I begin analyzing the weekly chart of XRT, since I wrote about the U.S. Dollar yesterday a quick follow-up.
Today, the dollar declined after making a new 2019 high yesterday.
One reason could be that foreign countries have been buying the dollar to hedge in case a China trade deal fails. With uncertainty on the future of tariffs, but with a more hopeful spin of some deal in the making, sellers of the dollar showed up.
With that said, commodities had a happier day today. Will that sustain?
Retail responded today to the uptick in the indices.
Looking at XRT, the 200-WMA (green) finally pierced. Again, the week is still young.
So we will look to see if XRT can hold 44.66, and then clear 45.00.
The resistance overhead at the 50-WMA (blue) is at 46.80.
To date, the most impressive aspect of this chart is the triple bottoms at 38.00 made in 2016, 2017, and in 2018.
If we are to enter into a slowdown or worse, a recession, as many predict, a breakdown under 38.00 would be an extremely clear signal of terrible times for our dear Granny Retail.
Until then, bulls hope for a warm, green, hand-knitted blanket.
S&P 500 (SPY) 272.70 now the nearest support to hold. 274.07 is the 200-DMA
Russell 2000 (IWM) 152.40 if holds this week, proves that miracles can happen. It’s a long trip though to 157 the 50-WMA
Dow (DIA) Has the move to 254.35 excited the bulls? It closed just above which makes it pivotal for tomorrow.
Nasdaq (QQQ) 170.14 cleared exciting the bulls.171.74 the 200-DMA.
KRE (Regional Banks) 55 now pivotal with 56 next resistance.
SMH (Semiconductors) 101 key pivotal area on weekly chart with 100.35 support at the 20 DMA.
IYT (Transportation) 185.37 now support with 189.65 the next bigger resistance point.
IBB (Biotechnology) 109.92 the 50-WMA resistance. 107 the weekly support held.
XRT (Retail) 44.66 pivotal for the week. 43.50 the must hold spot. 46.80 resistance