SPY Trends and Influencers July 19, 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 July Options Expiration Week that the Equity markets were mixed. Elsewhere looked for Gold ($GLD) to continue in its uptrend while Crude Oil ($USO) continued lower. The US Dollar Index ($UUP) seemed content to move sideways while US Treasuries ($TLT) were biased higher but might consolidate. The Shanghai Composite ($SSEC) was stuck in sideways consolidation while Emerging Markets ($EEM) were biased to the upside while they consolidated. Volatility ($VIX) looked to remain subdued keeping the bias higher for the equity index ETF’s $SPY, $IWM and $QQQ. The QQQ looked the strongest of the bunch reversing higher followed by the SPY but with the IWM looking weak.

The week played out with Gold falling lower early before bouncing while Crude Oil found support and bounced. The US Dollar crept higher in a tight range while Treasuries made new highs. The Shanghai Composite found resistance and bounced back while Emerging Markets consolidated in a broader range. Volatility made an attempt to move higher but fell back in the range to end the week. The Equity Index ETF’s had mixed week, just as it looked coming in. The SPY and QQQ moved higher to start, with the QQQ strongest and SPY a bit less impressive, with the IWM moving lower and before finding support Friday. 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 started the week gapping higher but could not get through the high from July 3rd. It dipped back under the 20 day SMA Thursday before recovering that dip and more to end the week higher. In the process it made a higher low. The RSI on the daily chart touched the mid line and held, reversing higher Friday. This was a lower low in the RSI, setting up a Positive RSI Reversal targeting 198.63. That would be a new all-time high. The MACD on this timeframe is falling though, showing divergence and creating a cautious tone. The weekly picture shows a sideways consolidation in the uptrend. The RSI is strong on this timeframe and holding at 70 with a MACD that is starting to level in an uptrend. If it wants to retest the rising trend support then it has room to pullback still or can move sideways for 2 months. There is support lower at 196.50 and 194 before 193 and 191. Resistance higher is at 198.30 and then there is the round number 200 and a Measured Move to 202.50 above. Consolidation in the Uptrend.

Heading in to next week the equity markets are again mixed. Elsewhere look for Gold to continue lower in its consolidation while Crude Oil continues lower. The US Dollar Index has a slight upward bias in the sideways price action while US Treasuries are biased to continue higher. The Shanghai Composite remains stuck in a sideways rut while Emerging Markets consolidating at resistance. Volatility looks to remain subdued keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts show a mixed picture though, with the QQQ the strongest and looking for more upside, while the SPY consolidates in the uptrend and the IWM is biased lower in the short run within its consolidation. Use this information as you prepare for the coming week and trad’em well.

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