SPY Trends and Influencers August 3, 2013

Last week’s review of the macro market indicators suggested, as July ended and we moved into the dog days of August to look for Gold ($GLD) to continue the bounce in the downtrend while Crude Oil ($USO) consolidated or pulled back in the uptrend. The US Dollar Index ($UUP) looked lower while US Treasuries ($TLT) might consolidate but were biased lower. The Shanghai Composite ($SSEC) was biased to the downside but might continue to consolidate while Emerging Markets ($EEM) were biased higher in their downtrend. Volatility ($VIX) looked to remain subdued keeping the bias higher for the equity index ETF’s $SPY, $IWM and $QQQ. The QQQ charts seemed all for that, while the SPY and IWM suggested there was still some downside risk in the short term.

The week played out with Gold continuing to consolidate while Crude Oil found a bottom and then moved up. The US Dollar continued lower and found a bottom while Treasuries made a new low. The Shanghai Composite and Emerging Markets are confirming broad consolidation ranges. Volatility remained subdued and continued to decrease. The Equity Index ETF’s rose to new higher highs with the SPY and IWM making new all-time highs while the QQQ made a 13 year high, ending the week on the highs. 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 Weekly, $SPY
spy w

The SPY consolidated near the lower Shark Potential Reversal Zone (PRZ) early in the week until moving higher after the Fed announcement. The move takes the Relative Strength Index (RSI) up to the technically overbought level and over the upper Shark PRZ while the Moving Average Convergence Divergence indicator (MACD) continues higher on the daily chart. on the weekly view the RSI is also technically overbought with a MACD that is at very high levels. There is no resistance higher but there is a Measured Move to 171.25 and then 175 with 185 above. Support lower is found at 169.85 and 168 before 166. A pullback could be coming in this uptrend but the overbought RSI can remain overbought and move higher for a lot longer as well. Upward Bias.

As August begins look for Gold to consolidate or bounce in its downtrend while Crude Oil works higher. The US Dollar Index may consolidate in the downtrend while US Treasuries are consolidating but biased lower. The Shanghai Composite and Emerging Markets are also consolidating a bounce but biased to the downside. Volatility looks to remain very low keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ, despite the recent new highs. Use this information as you prepare for the coming week and trad’em well.

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