Friday the Economic Modern Family which consists of 5 sectors and 1 major Index made a quick turnaround in the small-cap Russell 2000 index etf (IWM) and the retail sector etf (XRT).
Both closed over their 50-Day major moving average and are now in unconfirmed bullish phases as seen in the above chart.
This shows that the Family is attempting to jump back into a mostly bullish phase.
However, the increased volatility could also be showing that the current market situation is choppy.
With that said, we need to be careful not to get whipsawed when trading.
Getting whipsawed refers to price movement that rapidly shifts direction.
To avoid this, we can use the Economic Family to time our trade entries.
A large benefit of using the Family is its ability to give a quick snapshot of the overall market without overcomplicating or adding too much data to the pot.
The adage less is more fits this situation quite well.
With that said, IWM and XRT’s recent flip into a bullish phase means we can watch them for potential breakouts to new highs.
However, because IWM has been rangebound and has a large amount of resistance at $234, we should be careful when entering trades nears this price level.
This will help prevent getting whipsawed if prices begin to reverse.
When it comes to other Economic Family members, we can watch for bullish phases to stay intact and for KRE and IYT, which are currently in cautionary phases to hold recent lows made from last Thursday on 7/8.
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Stock Market ETFs Trading Analysis & Summary:
S&P 500 (SPY) is trading at new highs.
Russell 2000 (IWM) is looking for a second close over the 50-day moving average at 225.49.
Dow Jones Industrial Average (DIA) needs to hold 348; next price resistance is at 351.09.
Nasdaq (QQQ) is holding near price highs.
KRE (Regional Banks) is sitting under 64.94 which is the 10-day moving average.
SMH (Semiconductors) main price support area is at 245. Price resistance is at 262.50
IYT (Transportation) has new support at 251.78
IBB (Biotechnology) has price support at 159. Price resistance resides at 165.79.
XRT (Retail) has price resistance at 99.24
The author may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not represent the views or opinions of any other person or entity.