NOTE: Weekly charts except for TLT and BTCUSD, both Daily charts

Considering where the Economic Modern Family was just a few weeks ago, clearly euphoria has spread since the election.

There are though, key levels to watch, not to mention a couple of Family members that look good but not quite as euphoric as the Dow, S&P 500 and NASDAQ behaved since last Tuesday.

The Fed lowered rates as well this week.

We will look at the long bonds and what might have been a key reversal. What does that mean for the Family?

Beginning with what I still consider to be the Empress if you will, of everything going forward, Granny Retail XRT looks poised.

Nonetheless, we have learned to wait for the evidence rather than anticipate and act too fast.

The 10-month consolidation and trading range breaks out over 80.00.

XRT did close on a new weekly high this past week, surpassing the closing level the last week of March 2024.

And that was the top, hence patience still please.

But, with a rate drop, new administration, the promise of “fixing” the economy, it is the consumer that must buy (literally and figuratively), into the promises.

(Incidentally, I suggest you listen to my recent media appearances-links below- as I talk a lot about the consumer, rates, tariffs, tax cuts, inflation, stagflation, reshoring, etc.)

So, for now, XRT over 80 is my main focus.

As for Granddad Russell 2000 IWM, the look is a bit different. On new 2024 highs, IWM is not quite clear of the all-time high made in 2021.

However, I am less concerned about that and way more concerned about XRT and what that does in the coming days and weeks.

Biotechnology IBB I still find intriguing.

With a new weekly close high for 2024 (and highest close since 2022), IBB looks great after 4 and ½ months of consolidating.

Medical Devices IHI, also looks amazing.

Sister Semiconductors SMH is strong and never really weakened to any disturbing point.

Even so, 260 remains the level to clear and the whole chip space is hardly my first choice, or even 2^nd or 3^rd as far as the next member of the Family to rally.
 

Before we finish the rest of the Family, a word on long bonds.

After the September rate cut, the long bonds reacted initially well, and then proceeded to sell off as yields rose.

Now, after this week’s rate cut, yields softened again and the TLT left a reversal bottoming pattern.

While the Real Motion momentum is nothing to write home about and the performance versus the benchmark remains risk on for the market, should yields soften more, it could be helpful to XRT, IWM and IBB.

So, keep watching.

As far as the rest of the Family…
 

As we have predicted, after the 4-year halving, Bitcoin rallies late October.

And so, it has. Is it because of Trump?

That didn’t hurt. Yet I believed this would happen regardless.

If 74k holds, we are looking at 90k next target.

Circling back to the next member, Transportation IYT, told us before anyone else that this rally was coming when the price plowed above 71.00.

The good ole Dow theory.

So now, IYT is on new all-time highs and while other Family members have yet to get there, we cannot be bearish with a strong transportation sector.

Finally, my favorite character in the Family, Regional Banks KRE or our Prodigal Son.

I purposely condensed the chart to show you the action from March 2023, when KRE crashed.

KRE is back to the scene of the crime at the 65 level.

Above there, we see 75 area as the next resistance.

Now, can the whole kit and kaboodle fall apart?

Of course.

But there will be signs. Here are the top 5

1. An island top or huge reversal day on high volume in any of the outperformers
2. One sector (most likely Granny) will fail to take out the range high and reverse.
3. Yields scream higher again
4. CPI (this coming week) comes in way hotter than expected
5. Full scale war-unlikely but has to be mentioned

Nevertheless, for now, all systems are go and you have a blueprint to follow for this week.

ETF Summary

(Pivotal means short-term bullish above that level and bearish below)

S&P 500 (SPY) 610 here we come

Russell 2000 (IWM) 227 support 244 the area to clear

Dow (DIA) Another new all-time high

Nasdaq (QQQ) 500 support 530 resistance

Regional banks (KRE) 65 pivotal

Semiconductors (SMH) 260 pivotal

Transportation (IYT) 71 now key to hold

Biotechnology (IBB) Looks strong-especially now over 147-150 next level

Retail (XRT) 76 support 80 to clear

iShares iBoxx Hi Yd Cor Bond ETF (HYG) 79.50 pivotal

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