Macro Week in Review/Preview October 29, 2011

• Posted by Greg Harmon
• on October 29th, 2011

Last week’s review of the macro market indicators looked going into the week as Gold would continue the move it started lower while Crude Oil consolidated at resistance with the possibility of a pullback. The US Dollar Index and US Treasuries both looked to continue lower. The Shanghai Composite was on the edge of collapse and Emerging Markets looked lower but with a chance of continuing to consolidate. Volatility was biased to the downside creating a supportive environment for the Equity Index ETF’s SPY, IWM and QQQ to continue higher. The SPY had the strongest set up going into the week with the QQQ the weakest. It was almost time to get bullish. The moves in the US Dollar Index and US Treasuries continued to be the key drivers for Equity markets so caution of a reversal was warranted.

The charts did a good job or telling where the broad market would head this week, except totally reversed for Gold and Crude Oil. Gold just ran higher and Crude Oil went right through that resistance, while the US Dollar Index and Treasuries continued lower. The Shanghai Composite caught a bid but really just arrested the downfall, while Emerging Markets broke the consolidation higher with the US markets. Volatility did break down out of its range facilitating higher prices for the SPY, IWM and QQQ, with the QQQ getting within 1% of its 10 year high. What does this mean for the coming week? Lets look at some charts.

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