The Market Can Remain Irrational Longer Than You Can Remain Solvent

In the past month, we have written about the Russell 2000 (IWM) Index leading the market higher.

Recently, IWM's stellar performance has revealed it as the new superhero of Mish’s Economic Modern Family.

Today was no exception as Grandad IWM was able to make all-time highs pulling ahead of the other major indices.

This year has seen a rise in first-time investors, as many decided the best opportunities for their stimulus checks to grow are in the market.

IWMs growth could be linked with the rotation out of large cap companies, with new investors searching for cheaper rapid growth stocks.

While IWM broke to new highs, let’s see if the other family members are telling the same story.

Yesterday's transportation IYT looked the most worrisome, though today it was able to close over Monday's low of 218.38.

Granny Retail (XRT) also fell Monday, but today was able to move up clearing most of last week's trading range.

Now she sits close to new highs at 62.75.

Brother Biotechnology (IBB) held its gap made from Monday at 152.94.

Sister Semiconductors (SMH) had a small trading range day with 221.79 the next high to clear.

Regional banks, the underperformer of the Family, continues to lag, but for how much longer we wonder?

Tuesday’s inside day brings KRE closer to new multi-month highs, with the real test coming up at the 200 week moving average sitting at 52.70.

We are still watching the long bonds, high-grade bonds, and junk bonds or the outliers.

Clearly, with FOMC, the Fed is still very much present in LQD and HYG.

And as far as the TLTs they are not over the key area to cause concern but holding nevertheless.

Irrational exuberance? Yes. But the top? Not yet.

S&P 500 (SPY371.05 Resistance. 366.74 Support.

Russell 2000 (IWM) New all-time highs.

Dow (DIA) Inside day. 298.68 support.

Nasdaq (QQQ) 300 Key support. 308.60 Resistance.

KRE (Regional Banks) Resistance 200 week moving average 52.70 to clear. Support 48.48

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