I hear a symphony…
Only there are some discordant notes.
On the one side of the orchestra we have NASDAQ FAANG and Tech stocks building to a crescendo.
On the other side we have the Russell 2000 (IWM), Regional Banks (KRE) and the Retail Sector (XRT) sounding more like a rat-a-tat-tat, then quiet.
Therefore, while the audience focuses on the crescendo, some of us are watching the sporadic drumming of the Family more closely.
Let’s look at a chart of our favorite Sector ETFs:
The Retail Sector sits above the 50-week moving average but below the 200-week moving average. Clearly, to help her drum louder, XRT needs to clear that 200-WMA.
The Russell 2000 is under both the 50 and 200-WMAs. Maybe a good beating with a drumstick will wake him up.
The Biotechnology Sector (IBB) has to hold the recent breakout. We would not want to see it fail to follow through after looking so promising.
The Regional Banks ETF (KRE) can barely brush the cymbal. This is where all the stress of the economy is seen.
And the Transportation Sector (IYT) is not exactly creating any good vibrations either. It needs to.
Meanwhile, the Semiconductors Sector (SMH) plays with the loudest part of the orchestra. We might even say, she is conducting!
A 2-minute rundown on the regional banks from June 22, 2020 https://www.youtube.com/watch?v=1ReXz-kAWMk
S&P 500 (SPY) Inside day. 313 pivotal. 320 big resistance 302 support
Russell 2000 (IWM) 147.20 resistance with support at 140-141
Dow (DIA) 260 support 263 resistance
Nasdaq (QQQ) New all-time high making 247.82 (the last high) a pivotal point
KRE (Regional Banks) 41.65 resistance 40.00 pivotal, 37.00 major support
SMH (Semiconductors) Inside weeks- 139.78 last week’s low-155 resistance
IYT (Transportation) 158 support 168 resistance
IBB (Biotechnology) 136 support
XRT (Retail) 200-DMA 40.50 support to hold 43.50 resistance
Volatility Index (VXX) 34.50-38.50 range
Junk Bonds (JNK) LQD (iShs iBoxx High yield Bonds) Sitting on support.
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.