January 22, 2020
By Mish Schneider
The weekly charts of the Economic Modern Family (Russell 2000, Transportation, Retail, Regional Banks, Biotechnology and Semiconductors) tell a mid-week story.
With the exception of Semiconductors, all the other members are trading inside the trading range of last week.
What does that tell us?
To review, last night we looked at junk bonds JNK as a gauge of investor’s appetite for risk.
The 2020 high thus far is 110.33.
The price stopped right at a key trendline last week. 110 is pivotal. A move over 110.33 will indicate a breakout with more upside to come.
Today, JNK held 110.
Back to the Family, inside weeks give us a chance to have patience and watch to see which way the trading ranges break.
With Semiconductors SMH (top left), the only one above last week’s range, one might assume it continues to lead and will engender the other members to catch up.
Looking at the others, with the inside week thus far, we will soon know if SMH trades unrealistically bold, or if it is still the best indicator of a better economy to come.
If you have to track one, I suggest the Russell 2000 IWM. The range to break-170.56-164.07.
Second choice is Transportation IYT. That range to break is 203.89-196.60.
Russell 2000 (IWM) 166.93 pivotal
Dow (DIA) Inside day. 290.35 the level to hold
Nasdaq (QQQ) Made another new all-time high by a few cents and now 220.85 support to hold
KRE (Regional Banks) Confirmed caution phase with 57.10 pivotal resistance and 56.20 support
SMH (Semiconductors) A new all-time high and close on the intraday low. 144.90 pivotal support
IYT (Transportation) 195 major support with 200 pivotal
IBB (Biotechnology) 120.92 pivotal resistance with 118.50 support
XRT (Retail) 45.40-46.00 pivotal