Retail Outpaces Tech as Consumers Shrug Off Rates and Tariffs

While the tech sector tries to lead, as you can clearly see SMH or Sister Semiconductors is trying hard to hold onto the 50-week moving average and must hang in there. 

I am thrilled that Granny Retail XRT has taken the lead in the market. 

I am sure most are shocked about the retail sector doing so well with tariff news, high interest rates, real inflation still nuanced, and consumer sentiment declining. 

Nonetheless, we can thank beauty or lipstick consumers, and along with that, my focus, the Vanity trade.  

Fabulous earnings this past week from Ulta Beauty (NASDAQ:ULTA), ELF Beauty (NYSE:ELF), and Nu Skin (NYSE:NUS).  

Take that Nvidia (NASDAQ:NVDA)!  

The domino effect from the diet drugs will only continue to grow while waistlines shrink. This trend is in its infancy. 

Meanwhile, my overall sentiment is that: 

The “Inside” sectors: 

1. Transportation IYT has weaknesses which is notable.  
2. Regional banks KRE is showing stress. 
3. Retail XRT is neck-and-neck in strength with semiconductors.  

What does that all mean?  

Consumers have not given up, while the growth stocks remain the story.  

CAVEAT-should the transportation sector or banks fail further, and we see it in mainstream headlines, here comes the next correction (which we believe would be a buy opportunity).  

As for the rest of the Economic Modern Family, small caps IWM are wedged between the 50 and 200-WMA. 

Biotechnology IBB cannot seem to get out of its own way.  

Meanwhile, Bitcoin had an interesting week as well. 

Technically, after new all-time highs, Bitcoin is consolidating with a lot of support down to 98-100 K. 

By week’s end, we saw options right leaning slightly bearish with $359 million in outflows.  

We are still quite bullish and will be buyers of a dip. 

Our iShares Bitcoin Trust ETF (NASDAQ:IBIT) position from $44, we sold at $59.00  

We are now looking for a reentry.  

The sentiment that a legitimate store of value is changing. 

The Bitcoin Conference is over, with the biggest takeaway that J.D. Vance and President Trump both own crypto and believe it can help everyday people.  

For this coming week, we are looking for 

October 2022 versus April 2025, if similarities remain: 

1. Gold to Silver ratio could erode further, favoring silver (a move over $34).  
2. The long bonds could be bottoming (Fed comments on considering a rate cut is all that is needed)  
3. SPY could chop until late this year-still predict a higher close than 2024 of about 3-4%.  
4. CAVEAT-the dollar-just broke a huge long-term support level, which we have only seen twice in the last 14 years. 2011 Government shutdown, US downgrade and 2020 Covid. We do not know what this actual catalyst for the dollar breakdown is, but if I had to make a guess, I'd say foreign countries are selling and not buying the dollar. Not to mention the US is still rifled with high debt, high spending, high interest rates and administration confusion on tariffs 

As for the rest of the Family, keep eyes on transportation, regional banks and semiconductors. 

Retail is a winner, but to remain so, the other members of the Family must stay in the game. 

ETF Summary  

(Pivotal means short-term bullish above that level and bearish below)  

S&P 500 (SPY) 575 support to hold 600 to clear 

Russell 2000 (IWM) 200 support to hold 210 to clear 

Dow (DIA) 400 support 425resistance 

Nasdaq (QQQ) 528 resistance  

Regional banks (KRE) 55 support to hold 

Semiconductors (SMH) 250 to get through  

Transportation (IYT) 68 resistance  

Biotechnology (IBB) Watch for the 50-DMA to clear and confirm over 123 

Retail (XRT) 75 support and 77 resistance 

Bitcoin (BTCUSD) 102k closest support