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Bitcoin Ends Week at New Highs, Semiconductors Remain Bullish Post U.S. Data


Admittedly, numbers are sexy.

Think about how much focus all the economic stats that came out this past week got on all media.

Indices Chart

According to the talking heads, each was the defining one for the markets and economy.

If CPI and PPI are softer. That’s it, inflation is over. If Retail Sales are softer, that’s it, here comes recession.

FOMC-hawkish sort of-a bit unclear-that’s it, FED will hike again, then pause. Meanwhile, here are the weekly charts of the Economic Modern Family

Bitcoin is our newest member, so let’s look at that too. What do you see?

Does anything stand out as defining?

Each weekly chart has a 50-week moving average in blue. And a 200-week moving average in green.

I have written a lot about the 23-month MA.

I also like the weekly MAs. They are widely looked at by institutional investors and give us a bit of a quicker time frame than a 2- or 6-year business cycle.

BTC/USD-Weekly Chart

Beginning with Granny, S&P Retail ETF (NYSE:XRT), she ended the week near the lows of the week before and well above the March lows. Under 58, I’d get nervous about the consumer end.

At this point, though, we only tested the price support pre-inflation and retail numbers. Defining? Nah-jury out.

Next is Granddad Russell 2000 (IWM). We can say the same about Gramps as we did about Granny. Is that why they are the patriarchs and matriarchs of the U.S. Economy?

Next is Big Brother Biotechnology (iShares Biotechnology ETF (NASDAQ:IBB)). Not only did IBB close higher on the week, but he is right in the middle of the 2 moving averages. Defining? Nah-jury out.

Looking at our Prodigal Son Regional Banks (S&P Regional Banking ETF (NYSE:KRE)), I even thought the bank earnings would give us some inkling of the next move. But no. Instead, KRE closed with an inverted doji candle, meaning anything can happen next as the price takes a giant pause above last week’s lows.

Moving over to Transportation (iShares Transportation Average ETF (NYSE:IYT)), which closed over the 50-week moving average and is in a bullish phase. We like that. When demand picks up, we take note.

Sister Semiconductors (VanEck Semiconductor ETF (NASDAQ:SMH)) looks strong. Like her grandparents, she is closing near the lows of this past week and the week prior. However, unlike her Granny and Gramps, she remains the leader of the Family and is in a bull phase.

Finally, Bitcoin (BTC) defies all the talking heads. While Sister Semiconductors is our Wonder Woman, Bitcoin is our Rebel with a Cause. BTC closed the week at new yearly highs!

What we love about the Family is how their interrelationships and relationships to the overall macro tell a story.

The story right now goes back to last weekend’s commentary.

A Picasso cubist painting: or a market with multiple perspectives that have distorted realities and perceptions. And most importantly, a really good time to know how to read charts.

ETF Summary

  • S&P 500 (SPY) Tight range to watch this week 412-415
  • Russell 2000 (IWM) 170 support- 180 resistance
  • Dow (DIA) Peeking over the 23-month MA 336-impressive if it holds
  • Nasdaq (QQQ) 312 support over 320 better
  • Regional banks (KRE) 41.28 March 24 low held and now has to clear 44
  • Semiconductors (SMH) 258 resistance with support at 250
  • Transportation (IYT) 219-228 the wider range to watch
  • Biotechnology (IBB) 130 major pivotal area-135 resistance
  • Retail (XRT) 58- 64 trading range to break one way or another



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