SPY Trends and Influencers March 23, 2013

Last week’s review of the macro market indicators suggested, heading into the next week that the equity markets were becoming mixed. Outside influencers saw Gold ($GLD) continuing to hold a range with an upside bias for any break out while Crude Oil ($USO) slowly grinds higher. The US Dollar Index ($UUP) looked ready to pullback in the uptrend while US Treasuries ($TLT) were biased lower. The Shanghai Composite ($SSEC) and Emerging Markets ($EEM) were biased to the downside in the near term. Volatility ($VIX) looked to remain non-existent keeping the bias higher for the equity index ETF’s $SPY, $IWM and $QQQ. Their charts were a mixed bag though with the IWM the strongest followed by the QQQ building potential energy and the SPY perhaps ready to pullback or consolidate. If the US Dollar Index and Treasuries continued lower this would be a big tailwind for Equities.

The week played out with Gold drifting higher while Crude Oil moved up early, but consolidated later in the week. The US Dollar seems to be plateauing while Treasuries jumped higher. The Shanghai Composite found a bottom and bounced higher while Emerging Markets continued their move lower. Volatility bounced off of the lows if you can consider 14 a bounce up but remained subdued. The Equity Index ETF’s consolidated at their recent peaks with the SPY and IWM near all time highs and the QQQ still behind. 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 lower and then consolidated over the rising 20 day Simple Moving Average (SMA) in a bull flag. The Relative Strength Index (RSI) is bullish and holding over the mid line with the Moving Average Convergence Divergence indicator (MACD) signal line running lower but the histogram beginning to improve on the daily chart. If this is another short term bottom then the Measured Move (MM) higher takes it to 161.66. The weekly picture shows consolidation after breaking out and moving above the rising wedge. The RSI on this timeframe is starting to get extended but leveling while the MACD signal line continues to move towards previous extreme levels without a sign of slowing. The histogram remains flat and may give the first clue of any pullback in the signal. There is resistance higher at 156.80 and the all-time high at 157.52, with MM’s to 159, 161.66 and 177 above that. Support lower come in at 155 and 153.25 followed by 150. Make no mistake this uptrend remains intact, for the near term. Consolidation with and Upward bias in the Uptrend.

Heading into what should be a light shortened week starting with Passover and ending with the Good Friday market holiday the markets remain biased higher but the mix is shifting. Gold appears ready to continue the bounce in its intermediate downtrend while Crude Oil consolidates in its uptrend. The US Dollar Index seems ready for some consolidation or a pullback after its recent run while US Treasuries are biased higher in the intermediate downtrend. The Shanghai Composite looks ready to continue the rebound higher while Emerging Markets continue to the downside. Volatility looks to remain subdued, keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts are biased higher as well but the QQQ looks the best and on the longer timeframe with the SPY next and the IWM perhaps ready for a pullback. Use this information as you prepare for the coming week and trad’em well.

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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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