The Economic Modern Family has opened its loving arms to the bulls and to us after our 2 weeks away.

Beginning with Granddad Russell 2000 (IWM), Monday began with a gap up over the 50-DMA (blue). We will watch for a phase change confirmation. Furthermore, the monthly chart shows IWM back above the 80-month MA (green). Resistance at 191 area is on tap if IWM holds above 174.

Granny Retail XRT gave us the clutch hold before we left by never breaking down under the 80-month moving average (green). Now, XRT has more to prove and needs to be watched carefully. You can see the resistance at the 200-DMA (green), but, more importantly, keep watching the monthly chart.

XRT has not cleared the 23 -month MA (blue) yet in 2023. Both IWM and XRT are right into resistance on the momentum or Real Motion charts.

Another bright spot potential is in the Leadership chart, with IWM now outperforming the SPY. This could be a game changer if it continues.

Semiconductors (SMH), along with growth stocks, lead. Interesting that SMH touched the July 6-month calendar range high (green horizontal line) today. The momentum indicator also hit resistance. The monthly calendar never broke down. Now, we’re watching for SMH to clear (or not) the 160-161 level with volume.

Transportation (IYT) is back to last month’s highs. IYT is actually underperforming in momentum, while it cleared past the SPY in leadership. Marginally surpassing the 23-month right now, IYT must hold over 230 now to stay in the game.

The inside sectors of the economy, as represented by IWM, XRT, and IYT, still have a lot to prove, despite being impressive on this run. Semiconductors of course, are way stronger, but are also going into some headwinds.

These monthly charts have been extremely reliable in helping us gauge the major support and resistance. Seasonally, the market could remain strong. Nonetheless, this has been a year of #squarepegroundhole.

This is for educational purposes only. Trading comes with risk.

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