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Mish Schneider The economic happy family

In the following, Mish Schneider, director of trading research and education at MarketGauge.com, considers which sectors are looking bullish, and what moves they might make soon.

The economic modern family members are all in a bullish phase with transportation [IYT] leading the charge.

A rundown of each member shows the Russell 2000 [IWM] putting in some consolidation over Monday’s low of $223.40.



Watching IWM instead of larger indices like the S&P 500 is a better way to grasp the overall market recovery, as IWM represents 2000 small-cap companies, while the S&P 500 represents only 500 large-cap companies.

Even the Dow Jones [DIA] only accounts for 30 large-cap companies.

Moving on to transportation or the demand side of the economy, IYT started the week off with a small range day Monday, but held its ground, proving its stability over the 50-day moving average at $223.61.

Friday was a pivotal day for IYT, in which it broke to new weekly highs. Furthermore, IYT is close to all-time highs at $232.97.

XRT, or Granny Retail, has also done some consolidative work between $75 and $80.

Her return to normalcy after a price move up to almost $100 on 28 January makes trading securities or stocks in this sector much easier.

When trading, it is important to look at risk vs reward, but with crazy price action, as seen in the retail space, it can be tough to plan those levels out in a trade.

Next comes Regional Banks [KRE], which has been holding new support at $60. Knock on wood!

If KRE continues upwards, its next test comes from resistance around the $63-$66 area.

This resistance was created from highs going back to 2018.

Next, we have brother Biotech [IBB], which sits between support at the $168 area and highs at $174.04.

Then sister Semiconductors [SMH], which yet again made new all-time highs on Friday.

Considering how popular new tech issues have become this year and the surge in resources needed for cryptocurrency mining, the SMH sector looks perfectly positioned for the upcoming year.

This article was originally published on MarketGauge. With over 100 years of combined market experience, MarketGauge's experts provide strategic information to help you achieve your investing goals.

Disclaimer Past performance is not a reliable indicator of future results.

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.

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