SPY Trends and Influencers May 4, 2013

Last week’s review of the macro market indicators suggested, as we head into May and everyone tells you to sell and go away, to look for Gold ($GLD) to stall in the bounce while Crude Oil ($USO) continued higher. The US Dollar Index ($UUP) seemed content to move sideways again while US Treasuries ($TLT) were biased higher but might also continue to consolidate. The Shanghai Composite ($SSEC) was looking better to the downside with Emerging Markets looking to consolidate. Volatility ($VIX) looked to remain a non issue keeping the bias higher for the equity index ETF’s $SPY, $IWM and $QQQ. The reversal candlestick patterns to end the week suggested a pullback for the coming week though. Longer term the uptrends remained with the QQQ looking the strongest.

The week played out with Gold stalling at the falling 20 day Simple Moving Average (SMA) while Crude Oil met some resistance before finding a range around its SMA’s. The US Dollar broke lower before a false pop Thursday that sold back Friday while Treasuries moved higher in a pennant before falling back to end the week. The Shanghai Composite did not do much in its two shortened week while Emerging Markets peeked higher over their recent range. Volatility drifted at recent lows before falling Friday. The Equity Index ETF’s drifted early in the week before rocketing higher after the Non-Farm Payroll report Friday making new all time highs on the SPY and IWM and 12 year highs on the QQQ. 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 completed a rather boring week with a major move higher Friday to new All-Time Highs. The candle print for Friday is a Hanging Man, a potential reversal signal, if confirmed. Adding fuel to that side of the ledger is that 161.37 is a near perfect 127% extension of the previous move higher from June through September. But the SPY is in an uptrend. All of the SMA’s are rising and below the price, the RSI on the daily chart is bullish and rising and the MACD is also rising. There is a Measured Move higher to 164.25 and 166.5-167 would continue the 6.5-7 point higher tops in the recent move from November. The weekly portrait shows a move higher off of the consolidation that followed the break of the rising wedge. The RSI on this timeframe is also bullish, technically overbought, but barely and running sideways, with a MACD that is rising. There are some signs that raise caution, yes, but refer back to the bold line above. Support lower comes at 159.72 and 156.80 followed by 153.50. Continued Uptrend.

Heading into next week look for Gold to continue its consolidation with a downside bias while Crude Oil works higher in the neutral zone. The US Dollar Index looks better lower while US Treasuries are biased lower within the longer uptrend. The Shanghai Composite is at support but looks better for a break lower while Emerging Markets are looking strong. Volatility looks to remain subdued keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ, despite their moves higher to new highs. Their charts agree and point higher, but look better on the weekly timeframe as the daily views show some signs of being extended with Friday’s moves. Use this information as you prepare for the coming week and trad’em well.

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