Monday, Granny Retail XRT went green.
However, as I wrote last night, we still do not know if “in the current bearish phase, we know that short covering and premature buyers cause whipsaws.”
So, I am going to make it really easy. 
Granny, looking at the monthly chart, is under the 23-month moving average.
That tells us the consumer and spending confidence is in a 2-year business cycle contraction.
Recession, no. Stagflation, yes.
XRT must either run up and clear that moving average in April or get ready for more pain.
Even more interesting is our Sister Semiconductors SMH.
In March, SMH fell to its 23-month moving average.
Here it is the first day of April, and SMH is hanging onto the blue line for dear life.
Why is this significant?
A break of the 23-month will put SMH into a contraction for the first time since 2022-2023 during the aggressive rate hike cycle.
We can draw a few conclusions if we combine these 2 important members of the Economic Modern Family.
- SMH holds or at least stays close to the 23-month and Granny XRT runs to its 23-month MA and stalls.
- SMH fails the 23-month and XRT falls further.
- SMH rallies from here (or XRT) and now we have nothing more than a correction and a tradeable low with a good solid bounce.
ETF Summary
(Pivotal means short-term bullish above that level and bearish below)
S&P 500 (SPY) Made a new yearly low and bounced-real? 575 still sits overhead
Russell 2000 (IWM) 200 pivotal
Dow (DIA) Back over the 50-WMA or 417 now support
Nasdaq (QQQ) Made a new yearly low and bounced-real? Patience
Regional banks (KRE 55-60 the trading range to watch
Semiconductors (SMH) 205 monthly support held
Transportation (IYT) 63 support held
Biotechnology (IBB) Broke down harder and did not recover-130 has to clear
Retail (XRT) 70, then 72 resistance