Market Cycles From The Cradle To The Coffin

The Modern Family was seen shopping last week. No, not for new clothes, or fancy vacations. And not for a brand new car or bigger home.

Rather, Granddad Russell 2000, Granny Brick and Mortar Retail, Transportation, Sister Semiconductors, Prodigal Son Regional Banks, and Big Brother Biotechnology, decided it was time to prepare for the worst.

With that, they discussed funeral budgets.

Too morbid?

Well, when you consider that NASDAQ 100 went from market leader to a nail in the market’s coffin, not really.

So, as the Modern Family’s executor, I’d like to review where each one is at, and what are the potential opportunities to look for going forward.

A couple of weeks ago, I, like many others, posed questions that we knew the answers to could yield last week’s carnage.

Questions like:

Will Trump’s meeting with Kim Jong Un go well? TBA

Will stagnant wages and increased debt by consumers impact the market? Granny Retail reflected the suffering brick and mortar sector.

Will rising rates and a falling dollar eventually engender inflation? Fed raised, dollar fell, right on cue.

Will Powell seize the moment to raise rates by more than .25% and create some panic? Affirmative.

So what now?

Interestingly, when those questions were posed, the NASDAQ 100 closed on new all-time highs. It’s almost comical now, in a sardonic sort-of-way.

I did post some charts over the course of these two weeks. One that showed the Semiconductor’s (SMH) topping candle.

A chart of the Euro (FXE), with an emerging bull flag that signaled us to watch for a breakout.

The Commodities Index Fund ETF DBC, about ready (it did) to clear the 200 week moving average after years of being in a downtrend.

With the Dow at 2,350 and off a whopping 1250 points from the peak, the good news is, the weekly charts in the indices and most of the Modern Family, are intact in their uptrends.

IWM has major support at 146-the 50 week Moving Average, which is still sloping up. For IYT, that area is 177.50.