However, most of the Modern Family closed lower or flat on the day while, semiconductors ETF—VanEck Vectors Semiconductor ETF (NASDAQ:SMH)—made a large push to new highs ending +2.44% on the day.
The blatant move in tech could be showing us the next chapter of the market.
In hindsight, the tech industry was the first to recover from pandemic lows last year and is again showing strength compared to the other sectors.
Despite having been interrupted by supply chain issues, demand stayed strong in the tech space. Conversely, other sectors could be losing momentum.
With that said, one way to see if momentum is slowing or gaining is through MarkgetGauges proprietary Real Motion indicator.
On the Semiconductors (SMH) chart, Real Motion has recently broken through its 50-period moving average.
This confirms that momentum is now following price, since the price is currently over its 50-DMA.
On the other hand, members such as Retail—SPDR® S&P Retail ETF (NYSE:XRT)—and the small cap Russell 2000 via iShares Russell 2000 ETF (NYSE:IWM) have a negative divergence with price over the 50-Day moving average and real motion under the 50-DMA.
With most of the Modern Family showing weakening or diverging momentum, will Semiconductors’ break to new all-time highs drag the other indices higher, or will the rest of the family stay rangebound or begin to trend lower?
The Dow Jones Industrial Average was showing some stress.