SPY Trends and Influencers April 20, 2013

Last week’s review of the macro market indicators suggested, as we move beyond the tax deadline Gold ($GLD) had broken major long term support and looked lower while Crude Oil ($USO) continued lower. The US Dollar Index ($UUP) was biased to the downside while US Treasuries ($TLT) looked higher. The Shanghai Composite ($SSEC) and Emerging Markets ($EEM) were both biased to the downside, continuing their latest moves. Volatility ($VIX) looked 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 was the IWM and the strongest remained the QQQ. All of the Equity Indexes looked better on the weekly timeframe so a short term pullback was not out of the question in the uptrend.

The week played out with both Gold and Crude Oil continuing lower and then consolidating in bear flags. The US Dollar found a bottom and bounced while Treasuries continued higher. The Shanghai Composite also found a bottom and started a rebound while Emerging Markets bounced around but generally lower. Volatility made another higher high but fell back to end the week. The Equity Index ETF’s all pulled back with the IWM and QQQ making lower lows, before all bounced to end the week. 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 continued lower through the week before finding support at the rising 50 day SMA and bouncing slightly Friday. It also tagged the 153.50 level which has been key support since the beginning of March. The daily chart shows that the RSI is still trending lower, indicating potential for more downside, but remains in bullish territory. The MACD continues to fall as well. Still an uptrend but weakening. Out at the weekly view the pullback still has held over the rising wedge and has now allowed for the RSI to work off its technically overbought condition. That RSI is moving lower and the MACD is also rolling, both signaling caution. There is support below at 153.50 and 152.25 followed by 150 and 148.73. Under that starts trouble for the uptrend. Resistance is found at 156.80 and 159.71. Above that is uncharted waters. Uptrend With Consolidation or Pullback Possible.

Moving beyond the April Expiry for options the markets are a bit more damaged and showing more mixed signs of strength and weakness. Gold looks to continue to bounce in a bear flag while Crude Oil sits at long term support/resistance but looks better lower. The US Dollar Index is again showing signs of strength while US Treasuries continue higher. The Shanghai Composite and Emerging Markets remain biased to the downside with the Chinese market potentially ready to reverse that trend. Volatility looks to remain subdues and may have given a key signal on its spike keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts are mixed though with the QQQ the strongest and the IWM the weakest. Use this information as you prepare for the coming week and trad’em well.

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