Markets May Be In For More Trouble

The family, by design, is U.S.-centric and has been an invaluable resource to tell the story of the economy and the stock market.

We are looking at the weekly charts to gain perspective.

We begin with the and his wife, Retail (NYSE:). Both represent demand and supply, focusing on overall consumption and small business activity.

Note how each railed from their June lows, cleared back over their 200-week moving averages, then ran up very close to their 50-week moving averages.

We call this a trading range, and as such has been the strategy we have employed. Currently buying weakness and selling strength at turning points yields profits.

and XRT have sold off hard since Jackson Hole. They both now approach their 200-WMAs.

That makes the story clear. Should they hold, up we go. Should they fail those critical green lines, expect another leg lower.

Only 5% of Americans have adjusted their portfolios in 2022 in their 401(k)s and 403 (b)s.

Our biggest concern is at what point does the pain get too hard to deal with and we see massive liquidation?

Well, we’d rather be prepared and have a plan. Nonetheless, there are pockets of the market and within the family that are doing better than the others.

The following two charts are Transportation () and Regional Banks ().

We grouped them because they have sold off but are holding well above their 200-WMAs, given each relative strength.

This tells us that, although weaker, demand from delivery, travel and banking gives us a glimmer of hope that things aren’t as bad as folks think.

Plus, it supports our stagflation theory, where the economy is stagnating but not necessarily collapsing.

At least not yet.

Plus, it supports our stagflation theory, where the economy is stagnating but not necessarily collapsing. At least not yet.

The last two members are more speculative in nature.

Sister Semiconductors (), although in better shape than Granny and Gramps, on a daily chart basis, needs to hold 200.

If that level breaks, then we are looking at that 200-WMA at 186-187.

Big brother Biotechnology () is technically the weakest one of all the family members. Already priced under both the 50 and 200-WMAs, we see 118, or the early 2022 lows as the first level to hold. If that break, 110 could be the next stop of support.

If you put this all together, no doubt this market could be in for more trouble. However, never discount these weekly support levels.

Be open minded, keep the noise down in your head, and follow price.

The Family and the stock market is forward thinking. We never really know what lies ahead. Therefore, keep the Economic Family in your toolbox, and let them and the charts help you navigate your next trades.