SPY Trends and Influencers April 6, 2013

Last week’s review of the macro market indicators suggested, heading into the new Quarter look for Gold ($GLD) to consolidate or pullback in its neutral channel while Crude Oil ($USO) continues to March higher. The US Dollar Index ($UUP) seems content to move sideways while US Treasuries ($TLT) consolidate and are biased lower. The Shanghai Composite ($SSEC) looks sick while Emerging Markets ($EEM) are biased to the upside in the short run at support. Volatility ($VIX) 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.

The week played out with Gold continuing lower and finding long term support while Crude Oil put in a short term top and pulled back. The US Dollar did continue sideways with a downward drift while Treasuries broke their consolidation, but to the upside. The Shanghai Composite consolidated the move lower while Emerging Markets gave up their gains rolling over. Volatility bounced off of the lows but remained subdued and near resistance. In the Equity Index ETF’s the SPY made new multi-year highs and the QQQ 6 month highs before giving back some ground late in the week while the IWM continued its pullback. 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 made a new intraday high Tuesday, just below the all time high at 157.52, before pulling back to support Friday at 153.50. The Hollow Red candle Friday shows a strong intraday trend higher, that closed the gap down to start the day. The Relative Strength index (RSI) on the daily chart is trending lower but remains in bullish territory but the Moving Average convergence Divergence indicator (MACD) is continuing to move lower on the signal line and histogram on the daily chart. Downside risk remains. The weekly picture shows continued consolidation after the move higher off of the wedge break out allowing the RSI to work off a technically overbought condition. The MACD is leveling on this timeframe though suggesting that any rollover in it may bring the price down. Support comes at 150 below and resistance is found higher at 156.80 and 157.52. Continued Broad Consolidation with a Chance of a Pullback.

Heading into next week the markets are decidedly weaker but not giving up yet. Look for Gold to continue to bounce toward 1600 while Crude Oil moves higher in its triangle consolidation. The US Dollar Index looks to pullback in the uptrend while US Treasuries are back in the consolidation zone and biased higher. The Shanghai Composite and Emerging Markets remain biased to the downside. Volatility looks to remain contained keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ, but all look better to the downside on a very short term basis, with the QQQ strongest on the weekly timeframe. Use this information as you prepare for the coming week and trad’em well.

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