SPY Trends and Influencers February 2, 2013
- Posted by Greg Harmon
- on February 2nd, 2013
Last week’s review of the macro market indicators suggested, moving into the last week of January that the markets were still strong but getting a little cautious. Gold ($GLD) and Crude Oil ($USO) were consolidating with Gold better lower while Crude Oil was better higher. The US Dollar Index ($UUP) showed no signs of changing its sideways movement while US Treasuries ($TLT) were biased lower. The Shanghai Composite ($SSEC) and Emerging Markets $EEM) were consolidating in their uptrends with the Shanghai Composite the best bet for a pullback in the near term. Volatility ($VIX) looked to remain at unusually low levels keeping the bias for the equity index ETF’s higher. The $SPY and $IWM seemed be ready to turn over the leadership to the $QQQ, as both were becoming overbought.
The week played out with Gold popping higher early in the week only to hit resistance while Crude Oil melted up. The US Dollar moved lower as Treasuries continued down. The Shanghai Composite broke consolidation higher while Emerging Markets rebounded from a test of support. Volatility bounced off of the lows but but fell back remaining subdued. The Equity Index ETF’s made new highs with the SPY and IWM leading the way but the QQQ still lagging in a range. What does this mean for the coming week? Lets look at some charts.
The SPY moved up to the 150 level and consolidated there until it broke higher Friday, closing with another new multi-year high. The move out of consolidation gives it a Measured Move higher to 155 and then there is only the previous high at 157.42 from 2007 above that. The correction appears to have happened through time this time. The Relative Strength Index (RSI) is bullish and hovering around the technically overbought level, but no where near extreme, with a Moving Average Convergence Divergence indicator (MACD) histogram moving back higher along with the signal line on the daily chart. These support more upside price action but also start to give caution signals, not yet sell signals. The weekly view shows SPY at the top of the rising channel but with support for more upside from a rising and bullish RSI and a MACD that is positive and growing. Support lower is now found at 150 and then 147.10. More Upside.
Heading into the first full week of February the markets have their bull on. Gold looks to have stayed off a fall and will consolidate while Crude Oil continues higher. The US Dollar Index is moving lower again and US Treasuries are joining it to the downside. The Shanghai Composite is racing higher again after some consolidation and Emerging Markets are biased to the upside but consolidating. Volatility remains near historic lows and showing no signs of rising elevated keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. The weakening US Dollar and Treasuries support higher equity prices as well. And the charts of these ETF’s agree, with the QQQ looking to finally join the party higher. Use this information as you prepare for the coming week and trad’em well.
Join the Premium Users and you can view the Full Version with 20 detailed charts and analysis: Macro Week in Review/Preview February 1, 2013
Join the Dragonfly Capital Views Premium Membership
Sign up here to get deeper analysis and nearly 50 trade ideas every week.
If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
- SPY Trends and Influencers October 25, 2014
- Macro Week in Review/Preview October 24, 2014
- Premium Earnings 10-24-14
- Don’t Tell Merkel – The DAX is Below Critical Levels
- Thoughts on an Earnings Trade for Amazon
- Premium Earnings 10-23-14
- The Super Dollar’s Next Leg Up
- Listening to the Megaphone in CVS
- Premium Earnings 10-22-14
- Market Musings of a Non-Perma-Bull