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The Elders Both Fatigue: Grandpa Russell 2000 v. Granny Retail

Above is an AI image to illustrate that while, on Monday, Granddad Russell (IWM) was offering a helping hand to his wife Granny Retail (XRT), today they both looked more vulnerable.

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

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

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. And 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.

For more detailed trading information about our blended models, tools and trader education courses, contact Rob Quinn, our Chief Strategy Consultant, to learn more.

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Follow Mish on Twitter @marketminute for stock picks and more. Follow Mish on Instagram (mishschneider) for daily morning videos. To see updated media clips, click here.

Mish in the Media

Mish and Caroline discuss profits and risks in a time where certain sectors are attractive investments on TD Ameritrade.

Powell eyes a pause, Yellen hints at the need for more rate hikes, and debt ceiling talks face challenges… what a way to end the week, as Mish discusses on Real Vision’s Daily Briefing for May 19th.

Mish provides a roundup of the commodities and currency pairs to watch this week on CMC Markets.

Mish explains how the Retail ETF is at a critical level on Business First AM.

In this video, Mish walks you thru the Dollar, Euro, GBP, Gold, Silver and more.

Mish walks you through the fundamentals and technical analysis legitimizing a meme stock on Business First AM.

In this appearance on Fox Business’s Making Money with Charles Payne, Mish and Charles discuss if economy has contracted enough with support in place, and present 3 stock picks.

Mish covers the trading range and a few of her recent stock picks on Business First AM.

In this appearance on Real Vision, Maggie Lake and Mish discuss current state of the market, from small caps to tech to gold.

Coming Up:

May 24th & 25th: Mario Nawfal Twitter Space

May 25th: Wolf Financial Twitter Space

May 31st: Singapore Radio with Kai Ting 6:05pm ET MoneyFM 89.3.

June 2nd: Yahoo Finance

ETF 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 it’s 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.

Mish Schneider

Director of Trading Research and Education

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