SPY Trends and Influencers March 1, 2014

A weekly excerpt from the Macro Review analysis sent to subscribers on 10 markets and two timeframes.

Last week’s review of the macro market indicators suggested, heading into the last week of February the equity markets had recovered but needed to make new highs to resume the path higher. It looked for Gold ($GLD) and Crude Oil ($USO) to continue higher. The US Dollar Index ($UUP) and US Treasuries ($TLT) looked more neutral with the Dollar leaning lower. The Shanghai Composite ($SSEC) could rest in the recent uptrend or even pullback while Emerging Markets ($EEM) looked neutral in their short term uptrend. Volatility ($VIX) looked to remain subdued keeping the bias higher for the equity index ETF’s $SPY, $IWM and $QQQ. Their charts shared an upward bias but more decidedly so in the IWM, possibly the next leader in the rotation, with the SPY and QQQ a bit more cautious and consolidating.

The week played out with Gold probing higher but falling back late in the week while Crude Oil continued to consolidate. The US Dollar drifted until falling Friday while Treasuries broke their range and made a move higher. The Shanghai Composite pulled back and found support while Emerging Markets continued to drift sideways. Volatility held a tight range finishing slightly lower. The Equity Index ETF’s moved higher with the SPY finishing the week at a new closing high while the IWM made one Thursday along with the QQQ making a new 13 year high close. What does this mean for the coming week? Lets look at some charts.

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

SPY Daily, $SPY
spy d
SPY Weekly, $SPY
spy w

The SPY had some stickiness at the previous high levels from December and January, but it pushed through them late in the week to close at a new all-time closing high on Friday. The daily chart shows the RSI is rising and bullish and the MACD is also rising, both supporting more upward price action. The weekly chart shows a strong break above the previous range confirming last week’s indecision candle higher. The RSI on the weekly timeframe bullish and rising and the MACD is just about to cross up. These also support more upward price action. There is no resistance above Friday’s high at 187.15, but there is a Measured Move to 194 above. Support lower comes at 185 and 181.80 followed by 177.75. Continued Upward Price Action.

Turning the page of the calendar into March sees the equity markets again looking strong. Elsewhere look for Gold to consolidate or pullback in its uptrend while Crude Oil consolidates with an upward bias. The US Dollar Index looks in trouble and moving lower while US Treasuries are biased higher. The Shanghai Composite may get a short term bounce and Emerging Markets look to continue sideways with an upward bias. Volatility looks to remain low keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts also look higher with the SPY and IWM stronger than the QQQ. Use this information as you prepare for the coming week and trad’em well.

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