Michele Schneider | Mar 21, 2023 01:16AM ET
Is it here in the Russell 2000 (IWM)?
Check out the weekly chart.
The 50-week moving average just crossed below the 200-week moving average.
That is bearish.
The Leadership Indicators show IWM well underperforming the SPY. Bearish.
The Real Motion Momentum Indicator also has a moment in a bearish phase, albeit with some signs of oversold conditions.
This weekend’s Outlook pointed out,
"There are far too many disjointed economic scenarios playing out. These are all meaningful problems that could have a serious impact on the financial condition of the U.S.”
Our Risk Gauges are Risk-Off for the most part.
Even with Monday’s rally, sectors like Retail (XRT) and Transportation (IYT) are weak.
So where is the joy?
Our Sister Semiconductors is the bright spot. Opposite her Granddad IWM, she is in a weekly bullish phase.
VanEck Semiconductor ETF (NASDAQ:SMH) outperforms the SPDR® S&P 500 (NYSE:SPY).
One caveat-the Real Motion momentum indicator is in a bearish phase with momentum just skimming along the 50-WMA. Keep that in mind.
Add our Big View Indicator, and it says:
Risk-On
Neutral
What happens next?
Perhaps SMH is telling us that while IWM holds the December lows, the market can still rally.
Or perhaps, the “tech saves the day” trade, while still, the future, got a bit too ahead of itself, and the FOMC can bring everything tumbling down.
Everything except inflation. We still believe that will persist. Here is a look at this week’s economic data on tap.
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