Economic Modern Family ETFs Still Not Fully Convinced

Michele Schneider

Until the stock market sees what the Fed is thinking and possibly doing, all we can do now is wait.

The dichotomy between most of the Family of ETFs and the S&P 500 ETF (NYSEARCA: SPY) continues to daunt those who look “inside” the market.

Furthermore, unless one is already invested and planning on locking in profits, based on these charts, I’m not convinced that equities are where one should look for the next big boon.

Today, Draghi announced the intention of lowering rates. France has already gone the way of negative rates.

President Trump tweeted his optimism about a trade deal with China.

Meanwhile, China, Russia and India, in talks with one another, ran up in price.

What more must this family of stock market ETFs do to excite us about buying stocks?

Once again the Biotechnology Sector ETF (NASDAQ: IBB) is the winner of the most improved since last Friday.

However, the Regional Banks ETF (NYSEARCA: KRE) has not done too much except hold the green line or 200-WMA.

The Transportation Sector ETF (NYSEARCA: IYT) is just having an inside week and still must clear the blue line or 50-WMA.

The Semiconductors Sector (NYSEARCA: SMH) looks better. Yet, on the daily chart, SMH remains in a caution phase.

Retail XRT, may be forming a double bottom. But before we can say that with confidence, the price must clear 44.20 or its 200-WMA.

And our granddaddy Russell 2000 IWM, ran straight into resistance at the 50-WMA or 155.21.

The dollar gained. The gold to silver ratio improved but has yet to flip. If it does, that is an inflationary sign. Which could mean the dollar falls.

That in turn, could help equities temporarily. But, if yields and the dollar fall while silver turns bullish, we could still head towards stagflation.

Anyway, I am just happy to report that the old reliable family members like IWM IYT and XRT, continue to keep us sober.

Every Tuesday and Thursday, I will be on KKOB radio at around 6:15 PM mountain time (8:15 PM EST) to discuss markets and market news. https://www.iheart.com/live/770-kkob-5411/

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S&P 500 (SPY) – 290 now the support to hold. 294.95 the all-time high.

Russell 2000 (IWM) – 152.75-153.35 now pivotal support. Really must clear 155.20.

Dow Jones Industrial Average (DIA) – 262.87 now support. 269.28 all-time high.

Nasdaq (QQQ) – 183.60 the 50-DMA support. 191.32 all-time high.

KRE (Regional Banks) – 51.40 support.  Overhead resistance at 53.50

SMH (Semiconductors) – 105.50 now pivotal support. 108.75 the 50-DMA resistance.

IYT (Transportation) – Must clear 190 to look good. 185.50 pivotal. 183.50 support to hold.

IBB (Biotechnology)  – 105.60 is the 50-DMA support. Stopped right at resistance at 108.60

XRT (Retail) – 42.45 pivotal, 41 pivotal and 40.00 big support.

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The author may have a position in the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.

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