Macro Week in Review/Preview July 27, 2012

• Posted by Greg Harmon
• on July 27th, 2012

Last week’s review of the macro market indicators saw heading into the next week Gold looked to continue to consolidate in the downtrend with Crude Oil looking higher with a chance of consolidation. The US Dollar Index was poised to continue higher with US Treasuries leading them up. The Shanghai Composite and Emerging Markets looked biased to continue lower with Emerging Markets potentially consolidating. The Volatility Index pointed to continued lower fear allowing for the Equity Indexes, SPY, IWM and QQQ to move higher. The US Dollar and Treasuries suggested that this would not happen though. This correlation between Treasuries, the Dollar and Equities has been broken for a while but will likely reestablish with a divergence soon. The charts of the Equity Indexes showed that they remain biased higher in what may be bear flags. Also presenting a cautious view.

The week played out with Gold consolidating before a big move higher while Crude Oil pulled back early before moving back higher. The US Dollar and Treasuries made new highs before pulling back ending the week lower. The Shanghai Composite did continue lower while Emerging Markets found a bottom and rose. Volatility popped early only to recede to nearly unchanged. Through this reversal the Equity Index ETFs also started lower but had a strong finish to the week higher. What does this mean for the coming week? Lets look at some charts.

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