SPY Trends and Influencers March 29, 2013

Last week’s review of the macro market indicators suggested, heading into what was expected to be a light, shortened week starting with Passover and ending with the Good Friday market holiday, the markets remained biased higher but the mix was shifting. Gold ($GLD) appeared ready to continue the bounce in its intermediate downtrend while Crude Oil ($USO) consolidated in its uptrend. The US Dollar Index ($UUP) seemed ready for some consolidation or a pullback after its recent run while US Treasuries ($TLT) were biased higher in the intermediate downtrend. The Shanghai Composite ($SSEC) looked ready to continue the rebound higher while Emerging Markets ($EEM) continued to the downside. Volatility ($VIX) looked to remain subdued, keeping the bias higher for the equity index ETF’s $SPY, $IWM and $QQQ. Their charts were biased higher as well but the QQQ looked the best and on the longer timeframe with the SPY next and the IWM perhaps ready for a pullback.

The week played out with Gold pulling back mildly while Crude Oil resumed its move higher. The US Dollar made new highs at a critical level before pulling back Friday while Treasuries broke their consolidation higher but with topping candles. The Shanghai Composite fell from its perch while Emerging Markets found a bottom and bounced. Volatility continued to non volatile and stayed at historically low levels. The Equity Index ETF’s basically moved sideways with the SPY peaking above the range but the IWM and QQQ extending the consolidation. 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 moved higher after a brief test of the Diamond center line Monday showing resilience against potential disruptive news. The daily chart shows the Relative Strength Index (RSI) slowly moving higher, mostly sideways, in bullish territory with a Moving Average Convergence Divergence indicator (MACD) that is stabilizing after a short pullback on the signal line and improving on the histogram. The upside target on the Diamond Continuation is to 159, and these indicators support a move higher. Out on the weekly chart the price is now moving higher over the ascending wedge, and has a target of 177 on the break. There is also a Measured Move higher to 160 as it breaks the short 2 week consolidation. The RSI on this timeframe is technically overbought, but not near extreme and moving sideways, so posing little threat. The MACD however continues to rise to levels where a pullback has occurred in the past. There is resistance at 156.80 and then the all time high at 157.52, before the targets previously mentioned become important. Support lower is found at 155 and 153.25 followed by 150. Continued Upward Price Trend.

Heading into the new Quarter look for Gold to consolidate or pullback in its neutral channel while Crude Oil continues to March higher. The US Dollar Index seems content to move sideways while US Treasuries consolidate and are biased lower. The Shanghai Composite looks sick while Emerging Markets are biased to the upside in the short run at support. Volatility looks to remain subdued keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ, despite the new highs created recently. The QQQ looks the best on a longer scale while the SPY is better very short term. 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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