Monday, I focused on Biotechnology IBB, as a promising member of the Family to revive.
Yesterday, as mentioned in several interviews yesterday, we need to see follow-up by EVERYONE, and not just Sister Semiconductors SMH, who once again rocked it!
“One day doth not a rotation makes,” means that we need to see the “inside sectors” hang tough.
In other words, with the Russell 2000 (IWM), Retail XRT, Regional Banks KRE and Transportation IYT closing red yesterday, they must:
- Not bleed further
- Find buyers down at these levels to instill confidence in the market and economy beyond the growth stocks.
Just looking at our Granddad Russell 2000 you can see that IWM has not cleared the 50-DMA (blue) yet.
IWM remains an underperformer to the benchmark. Real Motion shows a bit of a bearish divergence.
Let’s compare this to Nvidia (NASDAQ:NVDA)-the wing beneath Sister Semiconductor’s wings!
I am always asked about it, have owned it FOREVER, yet rarely post on it-NVDA.
Right now, the reversal top yielded a more than 10% correction (the norm).
It slightly underperforms the benchmark with yesterday's rally.
Momentum had a mean reversion and held key support.
I'd look for a close over 125.60 first.
then watch for a move back over 127, which will look better.
After technical tops, the best result is when it takes out the highs, which in this case is 140.76.
Personally, I would love to see 107 as the add spot.
And let’s face it: it has become more evident that what the rest of the economy and Family do will indeed impact NVDA and SMH.
It always does.
ETF Summary
- S&P 500 (SPY) 5400 support
- Russell 2000 (IWM) 197-202 tightest range to watch
- Dow (DIA) 40k resistance
- Nasdaq (QQQ) 474 support
- Regional banks (KRE) Watching the range 45-50 CAREFULLY
- Semiconductors (SMH) 260 pivotal
- Transportation (IYT) 65.50 hurdle to clear 64 support to hold
- Biotechnology (IBB) 140 pivotal
- Retail (XRT) 74.50 support key 77 resistance to clear
- iShares iBoxx Hi Yd Cor Bond ETF (HYG) This is all risk on-as long as it holds above 76.50