Most of you know our Big View product since I often discuss our risk gauges.

I can report to you that our risk gauges show three out of the five with risk off.

Most interestingly, the SPY continues to outperform the long bonds, risk-on.

And junk bonds continue to outperform long bonds, risk on.

You can read more about it on Sunday when Donn and Keith publish their Market Outlook.

Another part of Big View is Sector Views. This part shows you the Economic Modern Family in their individual components.

In the Daily, I have focused mainly on small caps and retail.

Now, I want to show you three of the “kids”.

Plus, since commodities are now on everyone’s lips, I invite you to watch Your Daily Five segment I did Friday all about that.

Back to the kids.

Sister Semiconductors SMH has been making lower highs since the peak in July. She also trades below the July 6-month calendar range low.

Furthermore, SMH now underperforms SPY and the momentum on Real Motion shows a bearish divergence as momentum is under the moving averages, which are in a bearish phase.

This is a potential game-changer. Should Semi’s break September lows, it could get ugly since so much money is in the chip and tech sectors. People love to keep the dollar cost average down. That makes me shudder.

Big Brother Biotech IBB never really got going in 2023. IBB peaked in August 2021 post-covid.

Biotech trades under its 80-month or six to seven-year business cycle as well. This breakdown is concerning and points to much weaker economic times ahead.

And Regional Banks or my dear Prodigal Son?

Well, he has one foot out the door. By that I mean, out of the Family.

Here’s why.

When I created the Economic Modern Family, Regional Banks, and not big banks were included as a reliable way to assess the small urban and more rural communities’ trends on borrowing money.

A good sign for the economy is when Regional Banks do well and “local” folks are borrowing and successfully paying back loans to expand their lifestyles.

I called the sector Prodigal Son after 2008 because of the bible story.  The Banking sector is often lavish, then contrite when it oversteps, costing Americans dollars.

Since March 2023, during the “bank crisis”, KRE and many of the companies in that ETF basket have done nothing price-wise.

Broadening out the chart to March, since the decline, KRE has traded in a $10 range.

Now, that is a lot better than breaking the March lows if one wants to look at it optimistically.

Nonetheless, the trading range could be more a result of the rest of the market holding up or just a general lack of interest in this sector.

Or it could be a speedbump before the eventual annihilation of Regional Banks.

That would leave me with a new chapter of the Family-do we kill off or merely send away our Prodigal Son?

And do we think KRE should be replaced with big banks or XLF?

Here’s where our newest member comes in—Crypto.

But that’s an article for another time.

And, if you check out the Crypto Town Hall X Spaces below, you can hear some of our thoughts.

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

If you find it difficult to execute the MarketGauge strategies or would like to explore how we can do it for you, please email Ben Scheibe at Benny@MGAMLLC.com, our Head of Institutional Sales. Cell: 612-518-2482.

For more detailed trading information about our blended models, tools and trader education courses, contact Rob Quinn, our Chief Strategy Consultant, to learn more.

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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

Ever thought of owning commodities? Hear what Mish has to say about the key commodities you should consider in this video.

Mish participates in Crypto Town Hall X Space. You can sign in to your X account and watch it here.

In this video, Mish talks about trading Garmin Ltd. (GRMN) on Business First AM.

Mish and Dale Pinkert discuss the disconnect between news and markets-and how to best invest right now in this video from ForexAnalytix’s pre-market show.

In this video from CMC Markets, Mish shares her short-term forecast for USD/JPY and popular commodity instruments ahead of the US PPI announcement and September’s Fed meeting minutes, with recent dovish comments from Fed officials suggesting a potential shift in the committee’s policies.

Mish joins Business First AM to discuss the market reaction to the war in Gaza in this video.

Mish discusses what’s needed for a market bottom on the Financial Sense Newshour podcast with Jim Puplava.

Mish takes over as guest host for David Keller, CMT on the Monday, October 9 edition of StockCharts TV’s The Final Bar, where she shares her thoughts in the daily Market Recap during a day of uncertain news.

To quote Al Mendez, “The smartest woman in Business Analysis @marketminute [Mish] impresses Charles with her “deep dive” to interpret the present Market direction.” See Mish’s appearance on Fox Business’ Making Money with Charles Payne here!

Mish covers bonds, small caps, transports and commodities-dues for the next moves in this video from Yahoo! Finance.

In this video from Real Vision, Mish joins Maggie Lake to share what her framework suggests about junk bonds and investment-grade bonds, what she’s watching in commodity markets, and how to structure a portfolio to navigate both bull and bear markets.

Mish was interviewed by Kitco News for the article “This Could Be the Last Gasp of the Bond Market Selloff, Which Will be Bullish for Gold Prices”, available to read here.

Mish presents a warning in this appearance on BNN Bloomberg’s Opening Bell — before loading up seasonality trades or growth stocks, watch the “inside” sectors of the US economy.

Watch Mish and Nicole Petallides discuss how pros and cons working in tandem, plus why commodities are still a thing, in this video from Schwab.

Coming Up:

October 23: BNN Bloomberg

October 26: Cheddar TV on the NYSE

October 27: Live in-studio with Charles Payne, Fox Business

October 27: Live in-studio with Yahoo Finance!

October 27: Recorded in-studio with Investor’s Business Daily

October 29-31: The Money Show

Weekly: Business First AM, CMC Markets

November 1–13 VACATION

ETF Summary

S&P 500 (SPY): 417–420 supportRussell 2000 (IWM): 170 now in the rearview mirrorDow (DIA): 332 support pivotalNasdaq (QQQ): 351 recent low and supportRegional Banks (KRE): 35 next supportSemiconductors (SMH): 140 support.Transportation (IYT): 225 support holding a bright spotBiotechnology (IBB): Under 120 so 110 area next supportRetail (XRT): 57 key support still, maybe this and IYT bright spots—we shall see

Mish Schneider

MarketGauge.com

Director of Trading Research and Education