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Will Rally Spread Across All Corners of the Market? Charts Remain Divisive

Published 01/23/2024, 02:01 AM

Over the weekend I covered the Daily charts on the Economic Modern Family, featuring the Russell 2000 (IWM) and Retail (XRT).

Both are lagging the benchmark and in the middle of their January trend calendar ranges.

As Semiconductors, NASDAQ, the Dow, and S&P 500 continue to post new all-time highs and clear the January trend highs, I keep looking for evidence that the rest of the Family will either soon follow or anchor.

Hence, I turn to the weekly charts.Weekly Charts

Only Semiconductors (SMH) and Transportation (IYT) are in weekly bullish phases (when the 50-WMA-blue- is above the 200-DMA-green- along with price.)

While SMH is off to new highs, IYT has a distance to go even in its bullish phase.

What about the rest of the Family?

The good news is that none are in bearish phases.

Regional Banks (KRE), and Biotechnology are into resistance and in recovery phases as both are priced below the 200-WMA.

Plus, the 50-WMA is below rather than above the 200-WMA.

As KRE and IBB are in the weakest weekly phases, both areas are vulnerable to a sell-off.

Retail (XRT) sits right on the 200-WMA and is in a weekly accumulation phase.

I believe that the Retail sector is the key to what happens next given:

  1. The widening ratio between the price of growth and Family sectors
  2. Earnings of beg tech
  3. Fed meeting end of the month and interest rate policy
  4. Inflation numbers and particularly the price of food

The consumer sector has been in the game, but now, shows some signs of fatigue. XRT will tell us what comes next.

ETF Summary

  • S&P 500 (SPY) 480 now the pivotal zone
  • Russell 2000 (IWM) 195 pivotal, 190 support to hold
  • Dow (DIA) 375 support
  • Nasdaq (QQQ) 408-409 support
  • Regional banks (KRE) Back over 50 which needs to hold
  • Semiconductors (SMH) 184 support
  • Transportation (IYT) 254 support with 262 resistance
  • Biotechnology (IBB) 135 pivotal
  • Retail (XRT) Held support at 65 but still needs to get back over 70.00

Latest comments

Fully agree, great analysis.
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