Stock Market Stuck With A Plethora Of Mixed Signals


If you are having a hard time figuring out the market’s next moves:

  1. Think trading range-
    • the 2023 Outlook spells out reasons for a 1000-point trading range potential in the SPY from 3200-4200 (SPY).
    • We are adding that the NASDAQ 100 through (QQQ) can head to 330 before topping out. Then just as easily skid to support at 230.
  1. Think about this-the relationship between the high yield/high debt bonds and the 20+ year long bonds is as mixed up as you.

On the one hand, finally, the high yield bonds are just starting to outperform the long bonds-risk on. (See down arrow)

On the other hand, the real motion momentum indicator flashed a mean reversion on junk bonds. (See up arrow) (Check out our Big View this weekend for the latest on key market internals)

So the indices are stuck. The bond relationships are stuck. The economic data is stuck. Recession coming or soft landing achieved? Stuck.

What about inflation, geopolitical stress, climate issues and food shortages along with wage increase demand and social unrest?


Perhaps the Economic Modern Family can help.

The Russell 2000 (IWM) or Granddad of the Economic Modern Family, had a golden cross, and cleared the December highs (not the August ones though).

202 is where major resistance from the 23-month MA sits. Real Motion shows new highs in momentum. A positive.

Triple Play shows leadership against the benchmark. A positive.

Granny Retail (XRT) shows similar technical patterns.

Forget the rest and just look at Granny and Gramps, one should think blue skies.

Look at the 23-month moving average though at 78.00, and XRT trades well below that level.

Until proven otherwise, trade with a mindset that the market is approaching the top of the range.

Also, do not get overly complacent about inflation peaking-we still see a potential train wreck.

However, the modern family has an amazing track record. That means above these range resistance levels, follow their lead.

More By This Author:

What Are The Equities Market’s Warning Signs?
Inflation, What Inflation?
Not Invested In Precious Metals Yet?

Disclaimer: The information provided by us is for educational and informational purposes. This information is based on our trading experience and beliefs. The information on this website is not ...

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