Over the weekend I wrote about the July 6-month calendar range reset happening this week!
Our inside sectors of the US economy, retail (Retail Sector ETF (NYSEARCA: XRT)), small caps (Russell 2000 NYSEARCA: IWM)), and transportation (Transportation Sector (NYSEARCA: IYT)) all stopped at the January 6-month calendar range high and never cleared.
The Semiconductors Sector ETF (NASDAQ: SMH) did.
Now though, given earnings, tariffs, CPI, retail sales, nagging yields and seasonal weakness, the new range will be quite telling.
The weekly charts of the economic modern family help us see what the next big move will be.
As of Monday July 14th, the entire family made their July high last week.
They made their July low in the first week of July.
This is huge!
We start out this week thus far, trading inside the trading range from last week.
That makes a lot of sense considering how much is on the line right now.
We now have the greatest opportunity to follow the range break up or down as both scenarios could present.
For example, the weekly chart of IBB Biotech, should the price clear last week’s high, that also
- Clears the calendar range high for July
- Clears the 50 and 200-week moving averages
- Makes this sector, which has been so beaten up, very attractive.
Semiconductors SMH, with earnings on tap in TSM and ASML, looks like it has the highest probability of clearing the July calendar range and continuing its upward trajectory.
I remain focused on the Retail Sector ETF (XRT).
The daily chart of the Retail Sector (XRT) shows the January 6-month calendar ranges with green horizontal and red horizontal lines.
Maybe I am just a technical geek, but this chart is so perfect, it will require only execution and no second guessing if it aligns into one of these scenarios
- XRT takes out both the January and the July 6-month trading range highs and follows through (July high depicted in black)
- XRT takes out the January calendar range low (red line) and July range low (black line) PLUS both the 50 and 200-DMAs which formed a golden cross.
- XRT takes out the July highs and then fails it (low risk short)
- XRT takes out the July calendar range lows and returns above it (low risk buy opp)
- XRT stays within the range for July thus far going nowhere for the time being. (Find another sector with a more interesting setup.)
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.
