As I wrote yesterday, we need to look no further than the Modern Family.
We are staking the next bigger move on what happens on Granny Retail XRT, or the brick and mortar sector of the economy.
Yesterday we asked, “Even with negative rates worldwide and the now lower rates in US, are the Central Banks holding sacks of potatoes with their tongues?”
SPY made a new high and closed below it.
None of the other indices came close, furthermore the Russell 2000 IWM sold-off and closed red.
Retail had a bad day barely holding support levels.
This could very well have been the top of the market.
What would change my mind?
After the Fed eases, the dollar falls, the SPY hits a new high, and we still cannot get the modern family on board, until that changes, we will not buy any new equities.
In fact, we have good stops and very little exposure.
And of course, I am now even more focused on commodities.
Let’s look at some levels.
S&P 500 (SPY) Given that this made a new all-time high at 302.63 and sold-off, it must hold 300 or we could see some fast Friday selling. 295 is the 50-DMA
Russell 2000 (IWM) 155 must hold or we will see a move closer to 152.25 or its 50-DMA. And over 159 everything changes
Dow (DIA) ATH 273.99 made in July. Today the high was 273.20. Double top? Has to hold 271 or could see 266.50
Nasdaq (QQQ) Unless this clears 194, under 192 can see 189.50 quickly
KRE (Regional Banks) 53-55 the range to watch
SMH (Semiconductors) 121 pivotal, 120 support and ATH 123.56
IYT (Transportation) Inside day with 190 now pivotal. Under 190 is 186.50 or the 50-WMA.
IBB (Biotechnology) now pivotal with the most important support at 102.60
XRT (Retail) 42-44 range to watch-under 42.00 the 50-DMA is at 41.20
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