Battle of the Elders: Grandpa Russell 2000 v. Granny Retail
Just look at the March lows in Granddad Russell 2000 (IWM).
And now look at the March lows in Granny Retail (XRT).
So who is right?
IWM has moved up for the March lows and, to start the week, took the lead. It cleared the 50-DMA in price, and is now in recuperation phase.
Real Motion-our proprietary indicator that lets you see hidden strength or weakness during market trends-right now is as interesting as the diversion in price between Gramps and Granny. IWM’s momentum indicator cleared the 50 and 200-DMAs changing phase to accumulation. That is a bullish diversion for IWM, as the price is still under the 200-DMA.
Granny XRT, on the other hand, shows momentum declining and below both moving averages. However, could be a mean reversion forming. Or at least we hope so.
Granny’s price sits at the March lows and at the 6-month calendar range low. She must get game, or I would assume, like her grandson Regional Banks KRE, she is flashing a huge warning.
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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 rearview 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.
Director of Trading Research and Education