All Indices Improved Their Market Phases This Week

Big Bro Biotech (IBB) is the most highly speculated and volatile sector of Mish's Modern Family. IBB is breaking out to new highs displaying Leadership.

The mid-terms are now somewhat behind us, and this week we saw the FTX crypto exchange file Chapter 11. Some investors worry that there might be more domino effects in the institutional crypto space. It is worth keeping an eye on.

Concerning the market, the mild CPI inflation numbers caused a rally to erupt. Yields plummeted, the dollar softened, precious metals exploded higher, and investors had an economic reason to support a Fed pivot. All indices improved their market phases this week, with Grandpa IWM and DIA closing above their 200-day moving averages; SPY & IWM are back above their 50-day moving averages. However, the SPY, IWM, and QQQs are all overbought on price and momentum, according to MarketGauge's Real Motion Indicator, and may ultimately be subject to mean reversion.

With high inflation and global central banks tightening, where do the indices go from here?

Looking at past seasonality patterns, the fourth quarter has strong mid-term election past bullish seasonal trends.

The 1973–1974 stock market crash was one of the worst downturns. It was compounded by the outbreak of the 1973 oil crisis, high unemployment, inflation, and the dollar's collapse

The bear market between January 1973 and December 1974 was one of the worst. In 1974, the S&P 500 increased by 20% in October and November before reversing most of the gains in December. Looking at prior bear market patterns and all three indices helps provide perspective on the overall market's direction.

SPY still has work to do before breaking out of its current trading pattern. The DIA and IWM have the most potential for growth in the short term. It's fundamental to understand where each index is trading relative to one another. The next several weeks should reveal which way these indexes are trending and whether they are trending in the same direction.

The perception of lower inflation also spurred the gold market to new highs and improved its market phase. Gold closed over its 200-day moving average and transitioned from bearish to an accumulation phase -- which has paid off handsomely for subscribers.

The sector leading the market up is Biotech (Sister Semiconductor), which is breaking out of a massive head-and-shoulders pattern on the daily chart, which we covered in live training yesterday. We also suggest paying attention to the indices' November 3 lows and any measured moves into resistance, such as critical levels like 420 in the SPY.

Risk management (Mish's specialty) is especially key in these volatile markets, and if you are not yet a subscriber to Mish's Market Minute Advantage service, now's the time!

Rob Quinn, our Chief Strategy Consultant, can provide pricing and trading software compatibility for our trading indicators and can offer a complimentary one-one-one trading consult. Click to learn more about Mish's Premium trading service.

"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 in the Media

Read Mish's latest article for CMC Markets, titled "What's Next For Key Sectors After the Midterms".

Mish explains why MarketGauge loves metals and is still patiently loading up equities on Business First AM.

Mish talks metals, rates, dollar, and which sector to buy/avoid in this appearance on UBS Trending.

See Mish talk with Charles Payne on Making Money about the Oil markets testing the limits of Fed policy, China, and what to buy in the metals.

Mish joins Cheddar to talk about some of the fallout from the most recent Fed Meeting.

See Mish join Neil Cavuto and Eddie Ghabour on Cavuto Coast to Coast to talk about the Fed's recent rate hike decision.

Click here to see Mish and Helene Meisler's panel at the Trader's Summit event!

Mish discusses Meta and Palantir and how trends are switching in this appearance on BNN Bloomberg.

ETF Summary

S&P 500 (SPY): 394 support, 402 resistance. Russell 2000 (IWM): 183 support, 190 resistance. Dow (DIA): 333 support, 341 resistance. Nasdaq (QQQ): 283 support, 291 resistance. KRE (Regional Banks): 63 support, 68 resistance. SMH (Semiconductors): 215 support, 224 resistance. IYT (Transportation): 225 support, 233 resistance. IBB (Biotechnology): 132 support, 136 resistance. XRT (Retail): 63 support, 67 resistance.

Keith Schneider

MarketGauge.com

Chief Executive Officer

Wade Dawson

MarketGauge.com

Portfolio Manager