SPY Trends and Influencers August 10, 2013

Last week’s review of the macro market indicators (abbreviated) suggested, as August began to look for Gold ($GLD) to consolidate or bounce in its downtrend while Crude Oil ($USO) worked higher. The US Dollar Index ($UUP) might consolidate in the downtrend while US Treasuries ($TLT) were consolidating but biased lower. The Shanghai Composite ($SSEC) and Emerging Markets ($EEM) were also consolidating a bounce but biased to the downside. Volatility ($VIX) looked to remain very low keeping the bias higher for the equity index ETF’s $SPY, $IWM and $QQQ, despite the recent new highs.

The week played out with Gold and Crude Oil tailing lower but rebounding to end the week. The US Dollar continued lower and found a bottom while Treasuries are trying to consolidate. The Shanghai Composite found resistance while Emerging Markets found a bottom and bounced. Volatility remained subdued at the lows while the Equity Index ETF’s mainly consolidated the latest move. 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 continued the long consolidation that began in late July. Touching the 20 day Simple Moving Average (SMA), it has a Relative Strength Index (RSI) that is in bullish territory but falling in the daily chart with a Moving Average Convergence Divergence indicator (MACD) that is also falling. Consolidation or a pullback is what this chart is saying. Out on the weekly chart it looks more like consolidation in the upward move. The RSI is technically overbought but is working that off and the MACD is moving higher but at a slower pace. There is resistance at 169.85 and then 171.25, before a Measured Move higher to 175. Support lower comes at 169 and 168 before 166 and 163. Consolidation in the Uptrend

Heading into the dog days of August the market trend is firmly higher but consolidation is reigning. Look for Gold to continue to bounce in its downtrend while Crude Oil consolidates in its breakout higher. The US Dollar Index looks set to continue lower while US Treasuries bounce in the downtrend. The Shanghai Composite and Emerging Markets are poised to consolidate in their bounces in the downtrend with Volatility looking to remain low. This keeps the bias higher for the equity index ETF’s SPY, IWM and QQQ, but their charts suggest consolidation may continue. Use this information as you prepare for the coming week and trad’em well.

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