Michele Schneider | Jul 11, 2021 04:40AM ET
Friday the Economic Modern Family, which consists of 5 sectors and 1 major Index, made a quick turnaround in the small-cap index (IWM) and the retail space (XRT).
Both closed over their 50-Day major moving average and are now in unconfirmed bullish phases as seen in the above chart.
This shows that the Family is attempting to jump back into a mostly bullish phase. However, the increased volatility could also be showing that the current market situation is choppy.
With that said, we need to be careful not to get whipsawed when trading. Getting whipsawed refers to price movement that rapidly shifts direction. To avoid this, we can use the Economic Family to time our trade entries.
A large benefit of using the Family is its ability to give a quick snapshot of the overall market without overcomplicating or adding too much data to the pot.
The adage 'less is more' fits this situation quite well.
With that said, IWM and XRT’s recent flip into a bullish phase means we can watch them for potential breakouts to new highs.
However, because IWM has been rangebound and has a large amount of resistance at $234, we should be careful when entering trades near this price level.
This will help prevent getting whipsawed if prices begin to reverse.
When it comes to other Economic Family members, we can watch for bullish phases to stay intact and for KRE and IYT, which are currently in cautionary phases, to hold recent lows made from last Thursday on July 8.
ETF Summary
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