Stocks began the day weak — weaker than most traders probably realized. As you can see in the intra-day chart below, short-term momentum, as measured by Real Motion, had rolled on Monday. As a result, when the SPY broke its 30-minute Opening Range low (as shown in the chart below), it accelerated lower.
The pattern to notice in the chart above is the divergence in Real Motion’s two moving averages vs. the same moving averages in the price chart. The day began with the Real Motion averages negatively stacked (the 50 in blue, under the 200 in green). The is weak momentum, even when the price moving averages aren’t negative (yet). When this divergence occurs, Opening Range breakdowns tend to follow through, as happened today.
Today was particularly bearish, as there were good reasons for stocks to be under pressure. Regional banks broke down to new year-to-date lows, and the crude oil ETF, USO, had its biggest down day since July 2022. This dragged down energy stocks and stoked fears of economic slowdown. Adding to the uncertainty, the Fed will make its interest rate decision tomorrow.
Flight to safety and worsening fears of economic slowdown were confirmed by the big rally in the long bond ETF, TLT. Tomorrow, gold may be the biggest mover. Gold is often referred to as the asset that rises and falls with inflation, but gold’s favorite time to shine is in periods when markets lack confidence in the monetary system.
Today, the market’s mood with respect to the regional banking system went from bad to worse, as exemplified by the action in the KRE and the XLF. Tomorrow, the Fed will likely raise rates again, which is expected. However, if Chairman Powell’s remarks create a further loss of confidence in the Fed’s ability to navigate the worsening banking crisis, economy, and inflation risks, the weekly gold chart (below) is ready to shine.
For more detailed trading information about our blended models, tools and trader education courses, contact Rob Quinn, our Chief Strategy Consultant, to learn more.
IT’S NOT TOO LATE! Click here if you’d like a complimentary copy of Mish’s 2023 Market Outlook E-Book in your inbox.
“I grew my money tree and so can you!” – Mish Schneider
Get your copy of Plant Your Money Tree: A Guide to Growing Your Wealth and a special bonus here.
Follow Mish on Twitter @marketminute for stock picks and more. Follow Mish on Instagram (mishschneider) for daily morning videos. To see updated media clips, click here.
Mish discusses the FOMC and which stock she’s buying, and when on Business First AM.
Mish covers strategy for SPY, QQQ, and IWM.
Mish and Nicole Petallides discuss cycles, stagflation, commodities and some stock picks in this appearance on TD Ameritrade.
Mish talks movies and streaming stocks with Angela Miles on Business First AM.
Mish and Charles discuss zooming out, stagflation and picks outperforming stocks in this appearance on Making Money with Charles Payne.
We all know at this point how difficult the market has been with all of the varying opinions regarding recession, inflation, stagflation, the market’s going to come back, the market’s going to collapse – ad nauseam. What about the people stuck in the middle of a range bound market? Mish presents her top choices for shorts and longs on the Friday, April 21 edition of StockCharts TV’s Your Daily Five.
Mish and Benzinga discuss the current trading ranges and what might break them.
Mish discusses what she’ll be talking about at The Money Show, from April 24-26!
Mish walks you through technical analysis of TSLA and market conditions and presents an action plan on CMC Markets.
Mish presents two stocks to look at in this appearance on Business First AM — one bullish, one bearish.
Mish joins David Keller on the Thursday, May 13 edition of StockCharts TV’s The Final Bar, where she shares her charts of high yield bonds, semiconductors, gold, and regional banks.
Mish joins Wolf Financial for this Twitter Spaces event, where she and others discuss their experiences as former pit traders.
Mish shares her views on natural gas, crude oil and a selection of ETFs in this appearance on CMC Markets.
Mish talks what’s next for the economy on Yahoo! Finance.
Mish joins Bob Lang of Explosive Options for a special webinar on what traders can expect in 2023!
Rosanna Prestia of The RO Show chats with Mish about commodities, macro and markets.
May 2nd-5th: StockCharts TV Market Outlook
- S&P 500 (SPY): 23-month MA 420.
- Russell 2000 (IWM): 170 support, 180 resistance.
- Dow (DIA): Over the 23-month MA-only index.
- Nasdaq (QQQ): 329 the 23-month MA.
- Regional Banks (KRE): 43 now pivotal resistance.
- Semiconductors (SMH): 246 the 23-month MA.
- Transportation (IYT): 202-240 biggest range to watch.
- Biotechnology (IBB): 121-135 range to watch from monthly charts.
- Retail (XRT): 56-75 trading range to break, one way or another.
Geoff Bysshe is the co-founder and President of MarketGauge.com. For nearly 20 years, he’s developed trading products, services, strategies and systems while also serving as a trading mentor for MarketGauge customers. He also provides regular commentary and trading instruction in the MarketGauge blog. Geoff is a former floor-trader who was a member of the FINEX trading the U.S.