SPY Trends and Influencers April 2, 2016

A weekly excerpt from the Macro Review analysis sent to subscribers on 10 markets and two timeframes.

Last week’s review of the macro market indicators which heading into the end of the first Quarter saw the run up in equities seemed to have exhausted at least in the short term. Elsewhere looked for Gold ($GLD) to continue to pullback in its uptrend while Crude Oil ($USO) did the same, but with a possible bounce. The US Dollar Index ($UUP) looked to continue higher in the consolidation range while US Treasuries ($TLT) might be breaking their downtrend to the upside.

The Shanghai Composite ($ASHR) looked better to the upside in the downtrend while Emerging Markets ($EEM) were biased to the downside in their uptrend. Volatility ($VXX) looked to remain low keeping the bias higher for the equity index ETF’s $SPY, $IWM and $QQQ. Their charts suggested the recent uptrend might be exhausting though with the SPY leading to the downside followed by the QQQ and the IWM consolidating.

The week played out with Gold rallying early only to give most of the rally back by the end of the week while Crude Oil continued lower. The US Dollar met resistance and fell back while Treasuries held in a tight range. The Shanghai Composite held in a tight range around 3000 while Emerging Markets found support and bounced. Volatility made a new for 2016 and held there. The Equity Index ETF’s all moved higher on the week well but ended worse, ending Friday near the weekly highs. What does this mean for the coming week? Lets look at some charts.
SPY Daily, $SPY
spy d

The SPY started the week following up higher off of the Hollow Red Candle that ended the last week. A bullish Engulfing Candle Tuesday that ended near the top and at the prior high gave hope of more upside. Wednesday saw a gap up open to the top of the Bollinger Bands® and then it was knocked back Thursday. Friday opened lower, opening an Island gap, that was quickly filled as the SPY moved higher the rest of the day, printing a near Marubozu candle.

This went to a new higher high and nearly completed the “W” first mentioned 4 weeks ago. The RSI on the daily chart shows strong in the bullish zone with the MACD flat. The weekly chart shows a strong move out of the short consolidation to the upside. The RSI on this timeframe is moving up off of the mid line and about to push into the bullish zone, with the MACD strong and rising.

There is still work to do to turn the longer view back to bullish, but it looks strong. There is resistance higher at 207.60 and 208.50 followed by 210.75 and 211.50 before 213. Support lower comes at 206 and 203.75 followed by 201.50 and 200. Continued Intermediate Term Uptrend.

SPY Weekly, $SPY
spy w

Heading into the first full week of April the equity indexes look strong and ready to make another leg higher. Elsewhere look for Gold to continue its pullback along with Crude Oil. The US Dollar also looks to continue lower, possibly testing key 12 month support while US Treasuries are breaking to the upside and look to continue. The Shanghai Composite looks poised to move higher in its downtrend as Emerging Markets continue to trend higher.

Volatility looks to remain low and biased lower keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ, despite the moves the past week. Their charts also look strong on both the daily and weekly timeframe with the only slight warnings coming from slowing momentum indications. Use this information as you prepare for the coming week and trad’em well.

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