What Are Current Stock Market Outliers Telling Investors?  

Earlier this week, I wrote about the potential for the stock market to get stuck in rangebound trading if pivotal price levels were not cleared in the major indices. 

That uncertainty has carried into mid-week as the major indexes besides the Dow Jones Industrials ETF (DIA) are struggling or making little to no change. 

This only confirms that traders need to be cautious before loading up on positions as we are still looking for signs the stock market will continue higher. 

With that said, while Tuesday’s tech selloff could be concerning along with the Russell 2000 ETF (IWM) stuck between both its 50 and 200-DMA, two main sectors managed to outperform the trading session.

Tuesday’s outliers are the Transportation Sector ETF (IYT) and Regional Banking ETF (KRE).

iyt transportation sector etf trading near all time highs stock market outlier chart january

Though neither broke to new all-time highs, IYT has cleared a five-day consolidation area and KRE closed +2.8% on the day. 

Now KRE has a second close over its 50-DMA confirming a bullish phase change. 

From a trading perspective based on daily charts KREs sudden gap and go price action makes it tough to find a good risk-based entry.

On the other hand, IYT has a better risk area with support from Monday’s low.

Either way, their outperformance merits investors’ attention as we can now watch these spaces for trade setups. 

How these play into the new years’ theme will be interesting if they can both hold their bullish phase over the 50-DMA. 

Next, we should watch for the small-cap index (IWM) to clear its resistance zone over the 50-DMA at $226.69 which would give us a bullish sign for short-term trading. 

Watch Mish’s latest appearance and view of Apple’s stock (AAPL)!

Stock Market ETFs Trading Analysis & Summary:

S&P 500 (SPY) 470-473 support

Russell 2000 (IWM) 226.69 resistance. 

Dow (DIA) Holding highs.

Nasdaq (QQQ) Bounced off 50-DMA at 393.34

KRE (Regional Banks) 75.76 next resistance level.

SMH (Semiconductors) Held over the 10-DMA at 310.76

IYT (Transportation) 281.45 resistance.

IBB (Biotechnology) 143.25 next support

XRT (Retail) Lots of overhead resistance at 94 area.

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.

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