Let’s get right to it. The charts and our tools are telling.
To start, I always look at moving averages and phases. Then I look at Real Motion and momentum to see if there is a divergence to price. After that, I check out our Leadership indicator which tells us how an instrument is performing against a benchmark. I look at weekly and monthly timeframes, as well as the daily charts. And, now that it is relevant, I also look at the calendar range. (See the video we did for StockCharts recently.)
Naturally, I have a few other considerations, but for now, we can go with these.
The Russell 2000 or Granddad IWM
Moving averages on the Daily, bullish. Momentum indicator shows no divergence as momo sits on the moving averages, as does price. Leadership is weak, well underperforming the benchmark. Sustainable?
Weekly charts show price on major support between 183-188. The monthly chart shows a 2-year business cycle expansion (above the 23-month MA) with resistance at December 2023 highs. The calendar range shows price sitting on the January lows or the very pivotal 190.
So either an incredible low risk buy, or fair warning, especially considering this:
Look at IWM’s struggle to keep up with growth.
This is the Daily chart of Granny Retail XRT. The similarity between XRT and IWM is clear.
Moving averages on the daily, bullish. Real Motion shows no divergence as momentum sits on the moving averages, as does price. Leadership is weak, well underperforming the benchmark.
Weekly charts show price on major support between 64-68. The monthly chart has price above the 23-month MA for the first time since 2021, while still far from the December 2023 highs. The calendar range shows price sitting on the January lows, or the very pivotal 68.00.
Both Gramps and Granny are critical components to the market and economy. Both reflect the rightful hesitancy for predicting the Fed’s next move on rates. Both are well underperforming growth stocks, yet sit on major support.
I hope this gives you a guide to this week. It sure does it for me as I am watching carefully for the all clear in the overall market now that QQQs and Semiconductors have gone fast and furious.
Speaking of Sister Semiconductors, she’s part of the Family as well, as are Biotechnology, Regional Banks, Transportation and Bitcoin. All have similar patterns to Gramps IWM and Granny XRT, which tells us the whole Family has their engines idling, and will either put themselves in gear or run out of gas.
This is for educational purposes only. Trading comes with risk.
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Mish in the Media
Mish looks at a selection of popular instruments in this video from CMC Markets, outlining their possible directions of travel.
Mish joins Jason Perz on the Against All Odds playlist, where she covers it all talking the mental game of trading, commodities, futures, equities, technical analysis, and macro.
Mish’s Market Minute on StockCharts TV returns, all new! Mish and Geoff Bysshe share how the powerful “Calendar Range” StockChartsACP plugin tells you who and what to believe, when to act, and what to trade. The new year is a big “reset” emotionally, and January sets the tone for the next six months AND the year. Every month is “like an inning in baseball,” financial reports focus on quarters, but analysts think in terms of the first half and second half of the year. How can you harness this knowledge to your benefit? Watch to find out!
Mish presents a three part market outlook in these videos from CMC Markets. In the first, Mish gives you a thorough outlook on which areas to invest in for 2024 in just four and half minutes. Then, she examines whether the S&P 500 can keep rallying, and finally, she investigates where 2024 could be the year of the heavy metals.
Mish offers her thoughts on a number of commodities ahead of the US CPI data announcement in this appearance on CMC Markets.
In this video from CMC Markets, Mish continues with her analysis on gold, oil and gas, this time adding the dollar/yen currency pair and her outlook on the dollar longer term.
Mish talks how the January effect will reveal itself and her focus on the vanity trade in this appearance on Business First AM.
Mish covers oil, gold, natural gas, silver and sugar, plus teaches you how to use charts to determine short-term trading strategies in this video from CMC Markets.
Mish and Maggie Lake discuss inflation (given the wage component in the payroll report), Bitcoin (given the looming deadline for ETF news), the market outlook, small caps, and emerging markets on this video from Real Vision.
Coming Up:
January 22: Your Daily Five, StockCharts TV & Schwab Network
January 24: Yahoo! Finance
January 25: Live Coaching
February 2: Money Show Life with Chuck Jaffe
Weekly: Business First AM, CMC Markets
ETF Summary
S&P 500 (SPY): New all-time high, making 480 the new 460.Russell 2000 (IWM): 195 resistance, 188-190 support.Dow (DIA): New all-time high here too; 375 now support.Nasdaq (QQQ): And ATH here as well; 408-409 support.Regional Banks (KRE): Back over 50, which needs to hold.Semiconductors (SMH): Wings; 180 now support.Transportation (IYT): 254 support with 262 resistance.Biotechnology (IBB): 135 pivotal.Retail (XRT): Held support at 65, but still needs to get back over 70.00.
Mish Schneider
MarketGauge.com
Director of Trading Research and Education