Apple, Nvidia, Meta, Alphabet, Microsoft, Amazon, and Tesla have now been penned as the “Magnificent 7.”
Only around 25% of the S&P 500 stocks have outperformed the benchmark, while these stocks continue to show massive leadership.
The Nasdaq is up around 15% year-to-date, outpacing the S&P 500.
Smaller cap stocks have struggled way more.
The Russell 2000 is flat this year, largely because bank stocks have dealt with significant deposit outflows.
Some say that tech has led every market rally so who cares if only 7 stocks lead the charge. I agree with that statement…
To a point.
Those of us who have a family-an Economic Modern Family, know that watching small caps and retail is the best way to assess how long tech can rally and lead for.
In the AI generated cartoon, both Grandpa Russell (IWM) and Granny Retail (XRT) look a bit disgruntled.
More importantly, the trading range prediction for this year along with stagflation-well, it depends where you look.
Of course, SPY and QQQ are outpacing thanks to tech, AI and our 7 huge winners.
Look at IWM and XRT (along with transportation, biotechnology, even Bitcoin with its $10,000 range).
All are naggingly in that trading range. That is stagflation.
XRT and IWM are not only stuck, but they are also teetering if neither can rally from here.
We love to zoom out to a monthly view.
The chart shows our 80-month moving average (green), which represents a 6–8-year business cycle.
We could call it our soft-landing barometer.
Grandma or the consumer is holding on after last Friday’s bounce. But marginally unless it clears 60.00.
IWM is further up from the 80-month MA, but nowhere near the 23-month moving average (blue) or the 2-year business cycle or period of growth.
We could call that our GDP and inflation indicator.
Yes, SPY, QQQ, SMH (Semiconductors) have cleared into a shorter-term business expansion cycle.
SPY just cleared in June while NASDAQ and SMH cleared in May.
Now, all eyes on our patriarch and matriarch.
Stock Market ETFs Trading Analysis & Summary:
S&P 500 (SPY) August 2022 high 431.73-and of course 420 now key
Russell 2000 (IWM) 180-now must hold while still miles from its 23-month MA 193
Dow (DIA) 23-month MA 337 pivotal
Nasdaq (QQQ) 370 resistance 350 now closest support
Regional banks (KRE) Right up to that 42.00 critical level and dropped
Semiconductors (SMH) A drop near 138-140 would be a decent correction
Transportation (IYT) 230 level is key plus today a very small trading range/inside day
Biotechnology (IBB) 121-135 range
Retail (XRT) 60 key now as is 56.25
Twitter: @marketminute
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.
