Open Your Mind To An Orderly Market In A Disorderly World

The title is meant to illustrate that the market might seem orderly, but the world as we know it has changed. Or, at the very least, the old rules may no longer apply.

Global growth is slowing, while awareness that the U.S. is not immune, is evolving. Traditional economics would suggest that if growth slows, commodities fall further in price.

I don’t think so. That paradigm has shifted. Why?

First, the reiteration this week that the central banks the world over have no issue with a “forever-til-further-notice” policy of artificially low rates.

Secondly, with global currencies weak, the other eventuality, that the U.S. can lose its stature as the world currency.

Yet, like with all predictions, they only matter when there is proof of their fruition. So yes, I have keen eyes on commodities, as per the 03-07-19 blog called “Can Commodity Prices Rise?”

On Friday, gold, and the metals soared. The ags and softs though? Not so much. And in the meantime, we also need to watch equities and particularly the Modern Family. They’ve not steered us wrong yet

The weekly charts show the strengths and weaknesses of the Family.

As I have mentioned in the past, a Family in concert is much more compelling than one in discord.

On the top left, Granny Retail had a rough week. The blue line or 50-week moving average, turned out to be significant resistance. So much so, XRT failed the 200-WMA (green line) as well with last week’s sell off.

Middle top chart is Regional Banks KRE. Likewise, KRE could not clear the 50-WMA. However, what we need to watch for now, is if KRE sells off more to test the 200-WMA. Or, if it holds these levels, chops around and perhaps tackles the 50-WMA again.

Far right top is Granddad Russell 2000 IWM. After two weeks above the 50-WMA, this week it failed, testing key support around 150.

Bottom far left, Sister Semiconductors remains the shining star, or Captain Marvel if you will. SMH closed above the 50-WMA. If the market holds, the momentum there should improve rapidly.

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