Michele Schneider | May 24, 2023 03:10AM ET
While Monday, Granddad Russell (IWM) was offering a helping hand to his wife, Granny Retail (XRT), today, they both looked more vulnerable.
Just as the S&P 500 failed to clear its 23-month moving average, we are hoping that IWM not only holds its 80-month MA (green on the monthly chart) but also holds its 50-DMA (blue on the daily chart)
Our proprietary indicator which lets you see hidden strengths or weaknesses during market trends, shows momentum still above its 50 and 200-DMAs.
It also remains, despite the price drop, in a bullish diversion meaning momentum is ok.
Yet, with today’s sell-off, and considering we might have hit the top of this year’s trading range in SPY, Granny remains a concern.
Granny XRT fell in price closer to the March low.
Momentum though is now going sideways, sitting on the Bollinger band, perhaps getting ready for a mean reversion.
That would be a better sign for everyone if XRT holds here and turns higher.
These two key Family members in the Economic Modern Family are not only telling a story-they are the story.
That story reflects a thin veil of optimism but with enough doubt that unless both move higher from here, the market could return to risk-off.
That is until SPY tests the lower regions of its persistent trading range.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.