Russell 2000 (IWM) and Retail Sector (XRT) Getting Fatigued

stock market investors falling returns image

An AI image to illustrate that while Monday, the Russell 2000 ETF (IWM) – aka Granddad – was offering a helping hand to his the Retail Sector ETF (XRT) – aka Grannny – they both looked more vulnerable on Tuesday.

And it showed up in the charts.

iwm russell 2000 etf rallying higher investing chart may 23

Just as the S&P 500 failed to clear its 23-month moving average, we are hoping that IWM not only holds its 80-month MA (green on the monthly chart) but also holds its 50-DMA (blue on the daily chart)

Real Motion – our proprietary indicator that lets you see hidden strength or weakness during market trends, shows momentum still above its 50 and 200-DMAs.

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It also remains, despite the price drop, in a bullish diversion meaning momentum is ok.

Yet, with today’s sell off, and considering we might have hit the top of this year’s trading range in SPY, Granny remains a concern.

xrt retail sector etf trading bearish chart may 23

Granny XRT fell in price closer to the March low. 

Momentum though is now going sideways sitting on the Bollinger band, perhaps getting ready for a mean reversion.

That would be a better sign for everyone if XRT holds here and turns higher.

These two key Family members in the Economic Modern Family are not only telling a story-they are the story.

That story reflects a thin veil of optimism but with enough doubt that unless both move higher from here, the market could return to risk off.

That is until SPY tests the lower regions of its persistent trading range.

Stock Market ETFs Trading Analysis & Summary:

S&P 500 (SPY) 23-month MA 420 Support 415

Russell 2000 (IWM) 170 support – 180 resistance

Dow (DIA) 336 the 23-month MA

Nasdaq (QQQ) 336 cleared or the 23-month MA-now its all about staying above

Regional banks (KRE) 42 now pivotal resistance-37 support

Semiconductors (SMH) 23-month MA at 124 now more in the rear-view mirror

Transportation (IYT) 202-240 biggest range to watch 

Biotechnology (IBB) 121-135 range to watch from monthly charts

Retail (XRT) This could be the new harbinger like KRE was in March. Poor Granny.

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.