SPY Trends and Influencers: Monthly Edition February into March 2013

Last month in this space my Monthly Macro Review/Preview had the monthly outlook suggesting Gold ($GLD) and Copper ($JJC) will continue to consolidate along with Crude Oil ($USO), while Natural Gas ($UNG) continued to pull back from its recent highs. If one of them moves higher it was expected to be Crude Oil. US Treasuries ($TLT) looked to continue their recent trend lower joining the US Dollar Index ($UUP). The Shanghai Composite ($SSEC), German DAX ($DAX) and Emerging Markets ($EEM) all continued to look better higher. Volatility ($VIX) was making new lows and increasing the tailwind to the equity markets. The Equity Index ETF’s $SPY, $IWM and $QQQ all were set up to continue higher in the coming months, with IWM the strongest followed by the SPY and then the QQQ bringing up the rear. How does an additional month impact the longer term picture? Let’s look at some charts.

As always you can see details of individual charts and more on my StockTwits feed and on chartly.)

SPY, $SPY
spy

The SPY had another month running higher with every analyst and investor looking for a pullback. In fact the current movement looks like a bullish AB=CD pattern that has a target of 174.58 in about July. The timing is less important than the level. There is support form more upside from a rising and bullish RSI and a rising MACD signal with a positive histogram. It also continues to be accumulated. There is a target on a Measured Move higher to 157 and support lower is found at 144 and 138. Continued Uptrend.

The monthly outlook suggests that Gold and US Treasuries are at critical support levels and poised lower. Crude Oil and Copper look to continue to consolidate while the US Dollar Index and Natural Gas are both biased higher. The Shanghai Composite, German DAX and Emerging Markets are all biased higher with each showing different signs of potential stalls or pullbacks. Volatility looks to remain drifting toward the historic lower range giving a tailwind to the Equity Indexes higher. The Equity Index ETF’s SPY, IWM and QQQ are set up to continue higher in their charts as well in the coming months, with the SPY the strongest followed by the IWM and then the QQQ. As noted on the individual charts there is room for some short term downside without breaking the upward bias. A massive move higher by the US Dollar could unhinge this as could a big reversal in Treasuries. Use this information to understand the long term trends in Equities and their influencers as you prepare for the coming months.

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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.

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