SPY Trends and Influencers April 29, 2017

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 saw with April Options Expiration behind, the equity markets were a bit stronger than the prior week in the short term and still in consolidation longer term. Elsewhere looked for Gold ($GLD) to pause in its uptrend while Crude Oil ($USO) continued to pull back lower. The US Dollar Index ($DXY) remained moving sideways in broad consolidation while US Treasuries ($TLT) continued to look better to the upside in the short term.

The Shanghai Composite ($ASHR) had morphed into a consolidation with a downward bias short term and Emerging Markets ($EEM) were pulling back in their uptrend. Volatility ($VXX) had moved up slightly from abnormally low levels to a more normal range but still low which continued to keep an upward push on the equity index ETF’s $SPY, $IWM and $QQQ. Their charts looked stronger in the short term, with the QQQ and IWM stronger than the SPY, but with all three consolidating near their highs and strong in the intermediate term.

The week played out with Gold drifting lower early and then settling while Crude Oil consolidated and may be bottoming. The US Dollar gapped lower and then settled while Treasuries followed the same path as Gold pulling back then settling. The Shanghai Composite found support at its 200 day SMA while Emerging Markets pressed up to the March highs and then held. Volatility gapped lower, settling at 3 year lows. The Equity Index ETF’s all started the week to the upside. The QQQ continued all week setting multiple new all-time high closes while the SPY lost some steam and held and the IWM gave back some gains Friday. What does this mean for the coming week? Lets look at some charts.

SPY Daily, $SPY

The SPY gapped higher Monday, taking it back over its 20 and 50 day SMA’s. It printed a doji Monday at the top of the Bollinger Bands® suggesting it may be a top. But Tuesday continued higher out of the Bollinger Bands and closing a gap from March. It stalled there and moved sideways the rest of the week ending back inside the Bollinger Bands but with a weak intraday candle, closing near the low of the day. Note that those Bollinger Bands are opening higher though. The daily chart shows the SPY a hair away from the all-time high.

It also shows the RSI is rolling over at the 60 level, just as it was getting into the bullish zone. The MACD is rising and positive though. A mixed bag on the short timeframe. On the weekly chart the move up is a clear break above the bull flag. The RSI on this timeframe is turning back higher after a reset and the MACD is leveling after its own minor reset. There is support at 237.10 and 236 followed by 233.70. There is no resistance above the all-time high at 239.78. Upward Bias in Consolidation.

SPY Weekly, $SPY

Heading into May the equity markets are making and testing highs again, but in a mixed fashion with strength shifting to the SPY and QQQ and away from the IWM. Elsewhere look for Gold to continue the pullback in its uptrend while Crude Oil consolidates deciding if it is a bottom or just a pause. The US Dollar Index continues to move lower while US Treasuries are biased lower in consolidation. The Shanghai Composite seems to have found support and Emerging Markets are biased to continue higher.

Volatility is back at abnormally low levels and looks to remain very low going forward, keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts show strength in the SPY and QQQ in the short term but the IWM rolling over. On the longer timeframe it is similar with the QQQ leading and the SPY turning up, but the IWM stalling at resistance. Use this information as you prepare for the coming week and trad’em well.

Join the Premium Users and you can view the Full Version with 20 detailed charts and analysis: Macro Week in Review/Preview April 28, 2017

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