Retail Insights: Channeling Profits Retail Insights: Channeling Profits

Written By Michael Gary Scott

Reflecting on the insight shared last week, the attention-grabbing movement in Granny Retail XRT unfolds like a vivid tapestry. Fingers tap as eyes follow, transfixed by the promise of a bull run over 80 or the cautious dance under 70, each note a nuanced market waltz.

The technical trader’s dream emerges with the unveiling of channel lines, each stroke crafted meticulously. A subtle dance upon the charts, tracing the ebbs and flows of market whims.

Contemplating the notion of a channel, one is transported through history’s corridors to 2010, where Semiconductors SMH played a key role in the Economic Modern Family, a vibrant technicolor in an ever-changing financial landscape.

“What is a price channel? A price channel is a continuation pattern that slopes up or down and is bound by an upper and lower trend line. The upper trend line marks resistance and the lower trend line marks support.”

A visual spectacle unfolds before our eyes, as the daily chart of XRT captures the essence of this tale, each data point a thread in the narrative. The dance of channel lines, once bullish or bearish, now runs parallel, a symphony of equilibrium.

Caught in the throes of this high and wide channel, XRT finds itself in a precarious yet intriguing position. Analyzing moving averages and market phases reveals a delicate balance, a harbinger of potential shifts.

The anticipation mounts as XRT hovers in the channel’s heart, awaiting the clarion call of breakout or breakdown. Yet, the truth lies hidden beneath the surface—the wider the channel, the quieter the storm, a paradox of the markets.

Unveiling the Path Ahead

An ideal scenario beckons—a consolidation at the channel’s extremities. A moment frozen in time, ripe for the plucking, signaling the dawn of a new era post-consolidation.

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A call echoes through the corridors of finance—tighter compression, a clarion call for action. The channel’s embrace tightens, the boundaries tested, revealing the market’s true intentions.

The chart whispers secrets of the future, a tale woven in numbers. The bullish phase holds firm as XRT grazes the 50-daily moving average, a testament to resilience in the face of uncertainty.

The Leadership chart paints a somber picture, with XRT lagging behind, a silent witness to the channel’s grip. The Real Motion indicator warns of premature action, a siren’s song tempting the unwary.

Momentum wavers in a delicate dance, the red dots a stark contrast to the moving averages, a signal of caution. Patience becomes a virtue, a cloak of wisdom in the tumultuous sea of retail.

Yet, hidden beneath the surface lies promise. Retail stands tall, a pillar of the financial world, a beacon guiding the SPY and Dow to new heights, a testament to resilience in uncertain times.

Insights from the ETF Landscape

(Pivotal means short-term bullish above that level and bearish below)

  • S&P 500 (SPY) 565 pivotal support
  • Russell 2000 (IWM) Range 215-225
  • Dow (DIA) Not an island top but could still be a topping action
  • Nasdaq (QQQ) 475 support 485 resistance
  • Regional banks (KRE) 57 pivotal Support
  • Semiconductors (SMH) 230 support 240 pivotal
  • Transportation (IYT) 67.00 support
  • Biotechnology (IBB) 145 support 150 resistance
  • Retail (XRT) 73.50 support 77 resistance
  • iShares iBoxx Hi Yd Cor Bond ETF (HYG) First week this closed above the 200-WMA-healthy