Last weekend's daily titles were: Weekend signs are a warning for the economical modern family.
The theory at the time was:
“If you look at the six-week chart and look at the pattern from late February until now, we have updated horizontal parallels to show that the whole family is range-bound at these higher levels.
Depending on how the consolidation level breaks down (up or down), it will be easier to follow and trade the funds. ”
The area we were most concerned about was Granny Retail. “Granny Retail XRT is at the bottom of a consolidation range near 74.50.”
We also had concerns about junk bonds. “The range-bound junk bond HYG weekly chart also shows that risks below 76.50 start to become more risk-off.”
As you can see from the updated chart, Granny Retail XRT has broken through the consolidation range.
HYG junk bonds fell below the consolidation range.
Caution should be exercised with junk bonds until prices rise above the lows of the weekly trading range.
Clearly, biotech continues to fall and has the distinction of being the first sector to break weekly stock price gains.
But what about others?
What should you be looking for this week?
Let's start with.
This month is the month of halving. Notice that the weekly consolidation range remains between 60,000 and 72,000.
That should make the next move clear. With a little more patience, we will see whether Bitcoin holds the support and breaks above the upper end of the range, or continues chopping within the range.
In any case, there is relative strength here at the moment.
For Granny Retail XRT, we want to see her hold the 200-WMA near 71.00 first. However, until she recovers above the 74.50 area, we are cautious on the stock.
() Grandpa usually follows grandma's instructions. So below 200 they're more cautious and above that level they're more friendly.
Biotech is already in the doldrums and now needs to hold at 50-WMA or around 129.
As expected, semiconductors continue to perform well. 210-240 is the current trading range. This indicates that if the market holds, SMH will pop first.
What the bulls don't want to see is SMH breaking out of the range.
The transportation industry is testing the bottom of the weekly price range. Interestingly, although they are relatively strong family performers, they are wary of breakdowns.
The most interesting for me are local banks. Friday started with big bank gains. Most reports were solid. Nevertheless, all banks opened lower and remained so throughout the session.
KRE remains slightly above its weekly trading range. With long-term bond yields softening slightly, the sector could hold out with a very low-risk entry point to the 50-WMA.
ETF overview
- S&P500 (SPY) 520 now resistance 509 50DMA
- Russell 2000 (IWM) 200 extremely important
- Dow (DIA) Confirm support for warning phase 378
- Nasdaq (QQQ) 437 50 DMA
- Local bank (KRE) Range of 45-50
- Semiconductor (SMH) Still above 223 Pivotals
- Transportation (IYT) Significant support at 67 and greater support at 65, now below 50-DMA
- Biotechnology (IBB) 135 Resistance 129 Support
- Retail (XRT) Should stay 71-72 as sliced below support
- iShares iBoxx Hi Yd Cor Bond ETF (HYG) Risk-off for now as it broke through 76.50
