SPY Trends and Influencers April 27, 2013

Last week’s review of the macro market indicators suggested, moving beyond the April Expiry for options the markets were a bit more damaged and showing more mixed signs of strength and weakness. Gold ($GLD) looked to continue to bounce in a bear flag while Crude Oil ($USO) sat at long term support/resistance but looked better lower. The US Dollar Index ($UUP) was again showing signs of strength while US Treasuries ($TLT) continued higher. The Shanghai Composite ($SSEC) and Emerging Markets ($EEM) remained biased to the downside with the Chinese market potentially ready to reverse that trend. Volatility ($VIX) looked to remain subdued 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 were mixed though with the QQQ the strongest and the IWM the weakest.

The week played out with Gold continuing higher until prior resistance knocked it back while Crude Oil also moved up off of consolidation. The US Dollar started higher but fell later in the week while Treasuries held a tight range. The Shanghai Composite consolidated in a tight range at the recent lows while Emerging Markets tested higher before giving up some of their gains. Volatility fell back and remained subdued. The Equity Index ETF’s all charged higher, stopping before new highs and then giving back a little 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 moved higher off of support before pulling back slightly Friday. The Thursday Shooting Star candle just short of the all time high was confirmed lower so a pullback may be in order. The Relative Strength Index (RSI) remains bullish but is looking to roll over after failing to reach the prior high and the Moving Average Convergence Divergence indicator (MACD) has been trending lower, but looks to be turning up. A role reversal between the RSI and MACD but divergence likely to lead to more of the same. The weekly picture shows continued consolidation over the rising wedge. The RSI is bullish and holding near 70 with a MACD that is turning flat at a point where previous uptrends have ended. Sentiment is getting more bearish with some calling for ‘the big one’ which could just keep this from falling and just continue to correct through time. Resistance higher is found at 159.71 and then a Measured Move to 165.71 if it gets out of the current 6 point channel. Support lower comes at 156.80 and 155 followed by 153.50. Under that and it could get a little dicey with 148.80 the next major support. Short Term Bias For a Pullback in Consolidation Channel Within the Uptrend.

As we head into May and everyone tells you to sell and go away, look for Gold to stall in the bounce while Crude Oil continues higher. The US Dollar Index seems content to move sideways again while US Treasuries are biased high but may also continue to consolidate. The Shanghai Composite is looking better to the downside with Emerging Markets looking to consolidate. Volatility looks to remain a no issue keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. The reversal candlestick patterns to end the week suggest a pullback for the coming week though. Longer term the uptrends remain with the QQQ looking the strongest. Use this information as you prepare for the coming week and trad’em well.

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