Macro Week in Review/Preview June 8, 2012

• Posted by Greg Harmon
• on June 8th, 2012

Last week’s review of the macro market indicators saw heading into June the broad market looks weak. Gold looked better to the upside in the short run within the downtrend while Crude Oil looked to continue lower. The US Dollar Index and US Treasuries looked strong to the upside with a chance of consolidation. The Shanghai Composite and Emerging Markets were set up to consolidate within a downward bias. Volatility looked to continue higher as well. These influencers created an environment where the index ETF’s SPY, IWM and QQQ, were set up to move lower and the charts agreed. I cautioned though that consolidation by the US Dollar Index and Treasuries might forestall further declines in Equities. The QQQ looked the strongest of the Equity Indexes.

The week played out with Gold probing higher until it retraced half of the pop, while Crude oil held lower. The US Dollar and Treasuries pulled back, the risk outlined above that drove the week. The Shanghai Composite moved lower later in the week as Emerging Markets jumped on the Dollar and Treasury weakness. Volatility pulled back but held the higher range. The Equity Index ETF’s took their cue from from the Dollar and Treasuries as well moving back up to near term resistance, with the IWM and QQQ leaving potential Island Reversals. What does this mean for the coming week? Lets look at some charts.

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