SPY Trends and Influencers: Monthly Edition October into November 2012

• Posted by Greg Harmon
• on November 1st, 2012

Last month in this space my Monthly Macro Review/Preview had the monthly outlook suggesting the upside for Copper ($JJC) would continue while Gold ($GLD) might consolidate with an upward bias. Crude Oil ($USO) and Natural Gas ($UNG) were in consolidation as well with an upward bias. US Treasuries ($TLT) were in a broad consolidation with a downward bias and the US Dollar Index ($UUP) looked to continue its slide. The Shanghai Composite ($SSEC) looked to continue to move lower as well while Emerging Markets ($EEM) continued to consolidate and the German DAX ($DAX) looked strong. Volatility ($VIX) looked to remain low giving an upside bias the US Equity Indexes. The montage of other indicators also favored the upside for US stocks. The charts of the Equity Index ETF’s $SPY, $IWM and $QQQ were in agreement with this bias with the QQQ the strongest followed by the SPY and the IWM bringing up the rear with the best chance of continued consolidation. 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

The SPY completed a Tweezers Top for October. All it needs now is confirmation lower in November, far from certain. Continuing over the Hagopian Trigger Line for a bullish view, it has a Relative Strength Index (RSI) that is bullish and a positive Moving Average Convergence Divergence indicator (MACD) to reinforce the upward trend as it moves higher between the Median and Upper Median Lines of the bullish Pitchfork. It may just be consolidating before the next move as it is sitting near the full retracement of the 2007 high to the 2009 low. There will be a lot of volume that would consider taking risk off on a break even trade from that move lower. The previous high is the only resistance higher but the Measured Move takes it to 159. Support lower is found at 141.50 and 133.50 followed by 128.30. Under that turns the bias to bearish. Consolidating in an Uptrend.

The monthly outlook suggests further consolidation for Copper and Gold with an upward bias. Crude Oil is also in consolidation where Natural Gas has confirmed an upward bias. US Treasuries are in a broad consolidation with a in an uptrend and the US Dollar Index consolidating with a downside bias. The Shanghai Composite looks to continue lower as Emerging Markets consolidate and the German DAX looks strong, no change here. Volatility looks to remain low giving an upside bias the US Equity Indexes. The global of other indicators also favor the upside for US stocks with only Treasuries, if they move out of consolidation higher, giving downward pressure. The charts of the Equity Index ETF’s SPY, IWM and QQQ are in agreement with this bias with the SPY the strongest followed by the IWM and the QQQ bringing up the rear with the best chance of continued short term pullback. Use this information to understand the long term trends in Equities and their influencers as you prepare for the coming months.

For complete analysis of the 13 markets summarized here join the premium service and read Macro Month in Review/Preview October into November 2012 or send me an e-mail requesting a special Macro package.

Join the Dragonfly Capital Views Premium Membership

Sign up here to get deeper analysis and nearly 50 trade ideas every week.

Dragonfly Capital Views Performance Through October 2012 Expiry

I noticed an error on my website that continued to offer the Annual membership at $600, but if you clicked through you saw a price of $750. This is in the process of being corrected. If you clicked through thinking you were going to pay $600 and then stopped because of the higher price send me an e-mail at Greg@dragonflycap.com and I will honor the lower rate.

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