⏳ Final hours! Save up to 60% OFF InvestingProCLAIM SALE

Is the Whole Country Buying Teslas and Eating at Wingstop?

Published 02/16/2023, 02:31 AM
Updated 07/09/2023, 06:31 AM
US2000
-
DIA
-
SPY
-
QQQ
-
IBB
-
TSLA
-
IWM
-
KRE
-
XRT
-
IYT
-
SMH
-
WING
-

Wednesday morning brought some love to the US economy.

Granny Retail

The January retail sales rose 3% month/month vs. the +2% estimated.

The breakdown fascinates me.

Retail Sales By Category

With food inflation where it is, and egg prices the big headline, the leader for today’s number is FOOD, particularly eating out.

At the bottom of the chart, or with the least rise in sales by retail consumers, are groceries and gasoline.

Makes for some head-scratching, really. Considering folks bought cars and ate out, but did not gas those cars much or buy a lot of food to cook at home with.

Is the whole country buying Teslas and eating at Wingstop?

Both of those stocks did extremely well, with Wingstop (NASDAQ:WING) making new 52-week highs and Tesla (NASDAQ:TSLA) up more than double from its January low.

There are Retail Sales and Then There Is Granny Retail

Retail through the eyes of our Granny of the Economic Modern Family is a great go-to as the basket of SPDR® S&P Retail ETF (NYSE:XRT) has a good blend of e-commerce, brick-and-mortar, consumer staples, and discretionary goods.

XRT-Weekly Chart

Notice on this weekly chart that the 23-month moving average is much higher than current levels. Another point is that with Wednesday’s ebullience, the price remains below last week’s high.

Furthermore, last week’s high remains below the week prior. So, XRT is making lower highs each of the last 3 weeks but also has found a basis of support at 68.00.

Moving down to our Leadership indicator, Retail is outperforming the benchmark which makes sense given today’s retail sales number.

And that is a good thing given Granny resides next to the Russell 2000 as the king and queen of the US economy.

However, neither is proving to us yet that they are entering a growth stage beyond the 2-year business cycle high and can sustain this rally.

Finally, Real Motion on the bottom, shows a negative divergence. While on the price charts, the 50-DMA (blue) is above the 200-DMA (green), the momentum chart looks aslightlydifferent.

The 200-DMA is above the 50-DMA, so not as strong a phase. Secondly, the momentum red dots are below the 200-DMA while the price is above it on the top chart. And the momentum skips along the 50-DMA.

Although the momentum is weaker, it does not necessarily mean the price cannot rise. However, it does suggest that the overhead monthly moving average resistance is palpable, and bulls can have some fun but should also remain vigilant.

ETF Summary

  • S&P 500 (NYSE:SPY): 420 resistance with 390-400 support.
  • iShares Russell 2000 ETF (NYSE:IWM): 190 pivotal support and 202 major resistance.
  • Dow Jones Industrial Average ETF Trust (NYSE:DIA): 343.50 resistance 338 support.
  • Invesco QQQ Trust (NASDAQ:QQQ):  Nice comeback-still 2 inside weeks working, so watch 311 as a good point to clear or fail from.
  • S&P Regional Banking ETF (NYSE:KRE): 65.00 resistance 61 support.
  • VanEck Semiconductor ETF (NASDAQ:SMH): 248 cleared now support-254.60 last week’s high.
  • iShares Transportation Average ETF (NYSE:IYT): The 23-month MA is 244-now resistance 228 support.
  • iShares Biotechnology ETF (NASDAQ:IBB): Sideways action 130-139 range.
  • S&P Retail ETF (NYSE:XRT): 78.00, the 23-month MA resistance and nearest support 68.00.

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.