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Can the Market Rally at Warp Speed?

Can the Market Rally at Warp Speed?
(Michele ‘Mish’ Schneider)

By    |   Wednesday, 23 October 2019 12:01 PM

I went into a friend’s guestroom to grab my purse and saw Mr. Potato Head’s Star Trek featuring Captain Kirk and Klingon Kor on the shelf.

In my constant search for photos to use as metaphors, Mr. Potato Head’s Star Trek featuring Captain Kirk and Klingon Kor seemed deliciously apropos.

This reminds me of one of my favorite jokes-What does toilet paper and Star Trek have in common?

The answer is a bit indelicate so I will save it for the very end.

The point is, Kirk sought to destroy Klingons.

In the market, Kirk is the captain of the Economic Modern Family today or the Russell 2000.

Although the Modern Family has yet to “boldly go where no man has gone before,” as they are way off from all-time highs, Captain Kirk, I mean Granddad Russell, held onto recent gains.

If the small caps are Captain Kirk, that makes Klingon Kor the news.

The S&P 500 and Nasdaq turned red after the British Parliament delayed the Brexit vote.

As we have repeatedly seen, the news can either cause the market Klingon-type issues (Brexit) or drive it to rally at warp speed (trade war progress).

The potatoes remind us to try not to take the constant bombardment of news, fake or real, too seriously.

Just follow price.

Here are the daily charts:

Except for the iShares Russell 2000 ETF (IWM), all are in strong bullish phases.

IWM, which tracks the widely observed Russell 2000 Index of small-cap names, is in an accumulation phase.

The SPDR S&P 500 Trust (SPY), the NASDAQ 100 3x Short Daily ETP (QQQS) and the SPDR Dow Jones Industrial Avera (DIA) show how they have climbed near the top of the recent trading range highs. IWM has quite a distance to go.

The question right now is who leads and who lags?

IWM is trying to catch up because like Kirk, who never lost his optimism, the small caps hope for better news with China. And if not, they bank on a cooperative Federal Reserve.

SPY and QQQS fell partly because of Brexit, but also because of some softer earnings potentially on tap.

Should the iShares Russell 2000 Index (IWM) and the iShares Transportation Average ETF (IYT) continue their lead, warp speed.

Should they fall victim to the Klingons, we will need an emergency transport (or a beam me up to higher prices).

Some facts about Mr. Potato Head.

  1. He has posed with nearly every Presidential candidate. He’s bipartisan.
  2. He’s a billionaire.
  3. He promotes healthy eating
  4. 67 years later, he is still quite a-peeling!

In the spirit of keeping it light: The answer to the joke: They both travel around Uranus in search of Klingons.

Michele ‘Mish’ Schneider serves as Director of Trading Education at MarketGauge.com. For 20 years, MarketGauge.com has provided financial information and education to thousands. MarketWatch named Mish one of the top 50 financial people to follow on Twitter. In 2018, Mish won the Top Stock Pick of the year for RealVision. Follow her on Twitter at Michele Schneider @marketminute

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MicheleSchneider
As we have repeatedly seen, the news can either cause the market Klingon-type issues (Brexit) or drive it to rally at warp speed (Trade War progress).
market, rally, warp, speed
507
2019-01-23
Wednesday, 23 October 2019 12:01 PM
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