Recently we talked about transportation (iShares Transportation Average ETF (NYSE:IYT)) and retail (SPDR® S&P Retail ETF (NYSE:XRT)) sectors as indicators for market strength/weakness.
Transportation shows the movement of goods and travel expectations, while retail shows the consumer sentiment side.
Both help us understand investor expectations of the economy reopening and therefore help us understand if we are in a risk on/off environment.
The strength has clearly been noted with IYT breaking to new highs, and XRT sitting close to all-time highs at $99.
Most of the indices have picked up on these clues too, with 3 of the 4 major indices breaking to new highs this past week.
However, the NASDAQ 100 (QQQ) tested its 50-day moving average but was unable to clear its resistance level at $320.39.
Additionally, the S&P 500 (SPY) was able to break all-time highs but could not hold them.
This means that today, Monday, we should watch for follow-through from these 2 indices as this could be a short-term pivotal area to clear.
While the market continues to push a bullish bias, one thing that has jolted investors is the 10-year Treasury yield increasing over 1.60%.
If yields continued to move higher this could lead investors to worry about rising inflation.
Luckily, we have a special ETF that helps gauge investors risk appetite.
The yield corporate bonds ETF (SPDR® Bloomberg Barclays High Yield Bond ETF (NYSE:JNK)).
Currently it has been consolidating underneath resistance from the 50-DMA at $108.29.
If investors get spooked watch for this to break down.
Conversely, if JNK clears its 50-DMA and holds, the market along with investors should be appeased for the moment.
Key Levels
S&P 500 (SPY) Prior high 394.17
Russell 2000 (IWM) All-time highs.
Dow (DIA) New Highs. 320 new support.
NASDAQ (QQQ) Main resistance 320 the 50-DMA
KRE (Regional Banks) New highs.
SMH (Semiconductors) 216 support. 236 resistance.
IYT (Transportation) New highs.
IBB (Biotechnology) trading in middle of range of 50-DMA at 200-DMA. Held the 10-DMA at 152.51
XRT (Retail) 99 resistance. Highly correlated to GME.
Volatility Index (VXX) 13.38 next support.
Junk Bonds (JNK) 107.18 200-WMA support.
LQD (iShares iBoxx $ Investment Grade Corporate Bond ETF ) 132 resistance. 128.53 Recent low.
IYR (Real Estate) New multi month highs.
XLU (Utilities) Watching for a second close over the 50-DMA
GLD (Gold Trust) 3rd close over 10-DMA at 160.57
SLV (Silver) Flirting with 10-DMA at 24.06
VBK (Small Cap Growth ETF) Needs to clear the 50-DMA at 283.15
UGA (US Gas Fund) new high. 32.68 support the 10-DMA.
TLT (iShares 20+ Year Treasuries) Watching to find support.
USD (Dollar) Back over 91.60. Like to see this hold.
EZA (South Africa) Like to see this get back over 49.55
EWW (Mexico) 40.72 support.
MJ (Alternative Harvest ETF) Watching for potential entry. Holding over the 10-DMA 22.55
WEAT (Teucrium Wheat Fund) Support 6.15