Is The Market Spiraling Towards Death Or Rebirth?

I photographed this in Bluff, Utah near the San Juan River. 

In Native American cultures, “The spiral seems to tell a story about the labyrinthine journey of life and death and speaks of the possibility of rebirth.” 

“Each loop of the spiral progresses us to a higher level, yet always returns us to the same place. It demonstrates life renewal by returning to the source.”

Simply put, death brings new life.

In market terms, did this relatively shallow selloff create enough of a spiral to bring the market to new life?

Yesterday, we covered the Economic Modern Family.

The takeaway was that on the weekly charts, in Russell 2000 IWM, 157 is pivotal and in Transportation IYT, 189.62 is pivotal.

Today, IWM traded back above 157 while IYT did not manage to rise above its level or 189.62.

Moving on, Retail XRT is holding well above its 200-WMA, trying to see if it can get to the upper resistance at the 50-WMA or 46.80.

IBB cleared the 50-WMA and today, rallied to over 114, putting some distance between current price and the underlying support at 109.90.

KRE also closed green. So now we wait to see if it can get to and clear 58.30, the overhead 50-WMA or fail 56.00 and head south.

SMH has had a 3-day correction. It is still far from its underlying support at the 50-WMA at 100.60. 

What we see overall, is not enough death to create a perfect spiral that will create new life.

Furthermore, XRT, KRE, and IBB are very much alive.

Not only have they not shown any signs of death, they have not even fallen ill yet.

On the other hand, SPY, IWM, IYT, and SMH have shown weakness. But death?

Looking at the lessons of the spiral, presently, the market has not seen enough selling to bring it back to the same place or the place to buy.

With Transportation now under the 50-WMA, and as my bona-fide leader of the Family, it seems like it wants to return to the source before it is reborn.

Of course, we have yet to learn what that source or level is.

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