Yesterday presented a whirlwind of events that could easily give investors a rollercoaster ride.
Following the release of economic data earlier in the week and a wave of earnings reports, the market found itself at a crossroads.
Warren Buffett, the Oracle of Omaha, made headlines by revealing his latest stock holdings, with Ulta Beauty emerging as a standout addition.
This move, often dubbed the “vanity” trade, aligned perfectly with the surge in Granny XRT, igniting a broader market recovery.
Now is an opportune moment to dissect the Economic Modern Family and their weekly performance charts.
Granny XRT triumphantly surpassed the 200-week moving average, emphasizing the significance of overhead resistance and the pivotal role of the 200-WMA as a support level.
Meanwhile, Ulta’s daily chart exhibited a rally to resistance levels, signifying a need to overcome both the 50-DMA and the July 6-month calendar range low.
Turning to the (), Gramps showcased resilience even amidst significant market downturns, steadfastly holding above the 200-WMA.
Looking ahead, IWM faces hurdles at 215 and 227, while maintaining levels around 205 is crucial to sustain recent gains.
The intriguing realm of speculations had its star in , representing the ebb and flow of speculative capital.
IBB’s ability to cling to the 200-WMA last week sets the stage for scrutiny around the 150 resistance level in the weeks to come.
However, it is the Sister Semiconductors sector that commands a cult-like following, with SMH not just upholding the 50-WMA but also surpassing the critical 240 mark this week—a defining moment propelling speculation on its future trajectory.
But can SMH sustain above 240? The answer could dictate the market’s appetite for new highs in the near future.
Transportation, a steadfast family member throughout the year, showcased a harmonious relationship with retail—an upsurge in consumer activity mirrored in the movement of goods.
With the 50-WMA as the lynchpin, IYT must show resilience. However, notions of a significant economic upturn should be tempered by the considerable distance IYT needs to cover to recapture its 2024 peaks!
Retail stocks made modest price gains, but insufficient to warrant significant trading activity.
In the banking space, KRE found itself betwixt the two weekly moving averages, with sustenance above the 50-WMA serving as a critical touchstone. A breach could signal brewing troubles in banking circles.
And the ultimate question arises: Did Granny Retail and Grandpa Buffett come to the market’s rescue?
Despite the recent surge, the fundamentals dictating our areas of interest remain unchanged.
- Long bonds crossing 100 spell caution.
- Junk Bonds, while robust, must maintain their vigor.
- Stagflation continues to loom, especially as , , and exhibit resilience.
ETF Summary
- S&P 500 (SPY): 540 now marks a crucial support level.
- Russell 2000 (IWM): 205 support with 215 resistance ahead.
- Dow (DIA): Pivotal levels around 400.
- Nasdaq (QQQ): Facing resistance around the 475 mark.
- Regional banks (KRE): 50-52 as support.
- Semiconductors (SMH): Struggling to maintain support at 240.
- Transportation (IYT): 50-WMA seen as a solid support zone around 64.50.
- Biotechnology (IBB): Currently finding support at 141 with 146 acting as resistance.
- Retail (XRT): 73.50 support with resistance zones at 77-80.
- iShares iBoxx Hi Yd Cor Bond ETF (HYG): Risk-on sentiment returning above 78.00.
