MarketGauge has several quantitative trading models.
We use our proprietary indicator to rank the strongest performers in all the models.
This model is our Sector Rotation Portfolio with conservative risk parameters.
The top TSI ranking sector is and remains Semiconductors-or Sister Semiconductors in the Economic Modern Family.
You can see number 2 and 3 homebuilders) and {{45384|technology}.
Technology is close enough to semiconductors.
Homebuilders are not in the Family as they are important, but not the most salient aspects of the US Economy.
The FOURTH ranking sector though, is our Granny Retail). Last night's Daily covered why that is so important to the overall macro.
And what is also exciting is that {{40672|Transportation}) or our Tran member is number 6 and Brother {{6381|Biotechnology}) is number 8.
That makes four of the six members on the top 10 of the trend strength rankings.
Why is this so exciting?
I created the characters in 2016. The Family represents the economy for sure, but also the market.
The market is often 6 months ahead of the economic statistics.
The Family is the best leading indicator as it reflects the market but also tells us what to expect going forward.
As our Sectors ETF model has well outperformed since 2007, naturally since the Modern Family has made the cut, means that they too can begin to outperform.
“Leading sectors always outperform” is the basis of our quants.
And it is the basis of why we use the Family to gauge how the market will do (and the economy).
We already know how powerful the move in SMH or semiconductors has been to date.
Imagine if Granny Retail, Biotechnology, Transportation and even Financials continue up the TSI ranking food chain?
ETF Summary
S&P 500 (SPY) 500 support 510 resistance
Russell 2000 (IWM) 195 support 205 to clear
Dow (DIA) 385 pivotal
Nasdaq (QQQ) 430 support
Regional banks (KRE) Back to the 45-50 range
Semiconductors (SMH) 200 support
Transportation (IYT 276 should hold
Biotechnology (IBB) Looking at 140-142 next levels to clear
Retail (XRT) 75.50 2023 high cleared, now needs to hold
iShares iBoxx Hi Yd Cor Bond ETF (HYG) 77 big number to hold