Sometimes, it’s just that simple.
The Economic Modern Family has had its share of rotation. By rotation this year, we mean that, while Semiconductors wowed, Regional Banks soured. We have looked to certain members of the Family to hold their lead and wait for the other members to catch up. Or, conversely, we have held our breath as we have watched the leaders take a pause while the laggards need to hang in there.
2023 has been a bit of a cha cha cha in that way. No doubt the consumer has participated.
First, the retail investor has gotten the rally right. Secondly, the consumer has gone out this year and spent money. That money has been mainly spent on services though that include restaurants and travel. However, year-over-year credit card spending continues to decline, with the low-income consumers showing the largest rate of decline. We ask, is this sustainable?
Let’s see what Granny Retail (XRT) has to say.
On the Daily chart, XRT is in a bit of a tight range between 63.00-64.50. We love the leadership against the SPY benchmark.
On the weekly chart, we got a second close over the 50-week moving average, or a confirmed phase change to a recuperation. SPY continues to show leadership on a weekly closing basis. Momentum is lagging considerably.
On a monthly chart, XRT has a far distance to go to clear the 23-month moving average. To see sustained expansion, that blue line has to clear.
Putting together all three timeframes, XRT is key. Granny has to breakout over 64.50. Then, we need to see XRT clear the 200-WMA at 65.80 area. Finally, on a monthly chart, we cannot get too excited unless it clears over 70.50.
It’s a battle for sure, and one that will give you the best heads up on recession, stagflation or expansion. At the very least, we can say for now that, while Granny may need her cane to bow, she is yet to leave the mall.
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Mish in the Media
Mish, Brad Smith and Diane King Hall discuss and project on topics like earnings, inflation, yield curve and market direction in this appearance on Yahoo Finance.
Mish reviews her first-quarter trades in this appearance on Business First AM.
Mish talks women in the trading space and covers a wide variety of ideas in this interview for FreeFX.
Mish runs through bonds, modern family, commodities ahead of PCE on Benzinga.
Mish explains her bullish call on Bitcoin and provides her price target for the cryptocurrency in this video appearance on CNBC Asia.
Mish shares why the transportation ETF is such an important measure of economic strength and how retail stocks (XRT) continue to underwhelm on the Tuesday, June 27 edition of StockCharts TV’s The Final Bar with David Keller.
Mish discusses how business have been watching Russia in this appearance on Business First AM.
Read Mish’s commentary on how the situation in Russia impacts the markets in this article from Kitco.
Watch Mish’s 45-minute coaching session for MarketGauge’s comprehensive product for discretionary traders, the Complete Trader.
On the Friday, June 23 edition of StockCharts TV’s Your Daily Five, Mish covers a variety of stocks and ETFs, with eyes on the retail sector for best clues in market direction.
Read Mish’s interview with CMC Markets for “Tricks of the Trade: Interviews with World-Class Traders” here!
Mish delves into the potential next market moves for several key markets, including USD/JPY, Gold and West Texas crude oil in this appearance on CMC Markets.
Mish and Dale Pinkert cover the macro, the geopolitical backdrop, commodities, and stocks to watch on FACE Live Market Analysis and Interviews.
Mish and Ashley discuss buying raw materials and keeping an eye on Biotech on Fox Business’s Making Money with Charles Payne.
Coming Up:
July 12: Real Vision
July 13: TD Ameritrade
ETF Summary
S&P 500 (SPY): 443 now resistance, 440 pivotal and 430 support.
Russell 2000 (IWM): 185 pivotal.
Dow (DIA): 34,000 back to pivotal resistance.
Nasdaq (QQQ): 370 now resistance with 360 support.
Regional Banks (KRE): 40.00-42.00 current range.
Semiconductors (SMH): 150 back to pivotal number.
Transportation (IYT): 250 pivotal; under 245, expect more selling.
Biotechnology (IBB): 121-135 range.
Retail (XRT): 63 support.
Mish Schneider
MarketGauge.com
Director of Trading Research and Education