SPY Trends and Influencers April 13, 2013

Last week’s review of the macro market indicators suggested, heading into the new week the markets were decidedly weaker but not giving up yet. It looked for Gold ($GLD) to continue to bounce toward 1600 while Crude Oil ($USO) moved higher in its triangle consolidation. The US Dollar Index ($UUP) looked to pullback in the uptrend while US Treasuries ($TLT) were back in the consolidation zone and biased higher. The Shanghai Composite ($SSEC) and Emerging Markets ($EEM) remained biased to the downside. Volatility ($VIX) looked to remain contained keeping the bias higher for the equity index ETF’s $SPY, $IWM and $QQQ, but all looked better to the downside on a very short term basis, with the QQQ strongest on the weekly timeframe.

The week played out with Gold continuing higher but getting slaughtered to end the week while Crude Oil also moved up, but was slapped back in the end. The US Dollar continued lower, barely bouncing Friday while Treasuries held a short pullback and rebounded. The Shanghai Composite rebounded from support as Emerging Markets muddled along mainly sideways. Volatility continued lower and only briefly took notice of the Gold panic Friday. The Equity Index ETF’s continued the jump higher from last Friday’s lows with the SPY making new all time highs and the QQQ multi-month highs before all gave back some ground 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 broke out of a month long channel higher over 157.10 this week. The Evening Star Candle Thursday was confirmed lower Friday with a doji though so it may retest the break out before advancing. As it broke up the Relative Strength Index (RSI) is bullish and the Moving Average Convergence Divergence indicator (MACD) is turning up on the signal line on the daily chart, both supporting more upward price action. Looking out at the weekly view, things look very bullish. The consolidation over the break above the rising wedge resolved higher this week. The RSI is technically overbought, but bullish and not extreme, with a MACD that is rising. The MACD is near prior highs signaling a cautious stance going forward. There is a Measured Move higher to 160.25-160.50 and then 161.37. Support lower is found at 156.80 and 155. Continued Upside Bias.

As we move beyond the tax deadline Gold has broken major long term support and looks lower while Crude Oil continues lower. The US Dollar Index is biased to the downside while US Treasuries look higher. The Shanghai Composite and Emerging Markets are both biased to the downside, continuing their latest moves. Volatility looks to remain low keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ, despite the continued moves higher. Of these the weakest is the IWM and the strongest remains the QQQ. All of the Equity Indexes look better on the weekly timeframe so a short term pullback is not out of the question in the uptrend. Use this information as you prepare for the coming week and trad’em well.

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