Economic Modern Family - Where Are They Now?

Last week I wrote, “Looking at the Modern Family, the Russell 2000 IWM, if holds 134.65 by the end of this week, returns over the 200-week moving average and back from a weekly distribution phase into a weekly caution phase.”

Furthermore,“Transportation IYT, is also back above its 200-WMA. That means IYT must close the week out over 164. While Semiconductors never broke its 200-WMA, all the others have traded well below theirs.”

The charts show all six of the Economic Modern Family. To date, they have never steered me wrong. In a news sensitive market that yields 400-1000-point swings on any given day, I find huge solace in having these six charts as my guide.

What is the state of the Modern Family to date?

Going from top left to right, we begin with the Russell 2000 IWM. As mentioned on January 2nd, IWM did indeed clear the 200-week moving average to close well above 134.65.

IYT also closed well above its 200-WMA. That tells me the capitualtion from December 26th’s reversal day is still in play. Both IWM and IYT are in weekly Caution phases. They will need to close above those levels again this coming week to confirm.

So there’s that.

As far as the other sectors, only Semiconductors SMH, held the 200-WMA during the recent crash. Significant? It suggests that tech will be a good place to keep eyes this week.

A move over 88.40 or the high of the last week in December, is a positive. While a move below 80.71 most likely means SMH will visit 76.75, the 200-WMA.

As for the rest of the Family, Retail XRT, Regional Banks KRE and Biotechnology IBB have yet to come close, let alone clear, their 200-WMAs.

Interesting to note my comments on XRT, “I remember in 2017 talking about a double bottom at 38.00 (from 2016). Last week’s low 38.10. Maybe triple bottoms. Now, if it holds over 40, could see 44.00.”

The 200-WMA is at 44.84. If it fails to clear that level, could be a sign that this rally is peaking.

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