SPY Trends and Influencers April 3, 2015
- Posted by Greg Harmon
- on April 3rd, 2015
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 suggested, heading into Quarter end and a holiday shortened week the Equity markets looked short term vulnerable in their long term uptrends.
Elsewhere looked for Gold ($GLD) to try higher in its short term uptrend but with trepidation while Crude Oil ($USO) consolidated back in a channel. The US Dollar Index ($UUP) might continue to consolidate in its uptrend with a bias higher while US Treasuries ($TLT) were biased lower as they consolidated. The Shanghai Composite ($ASHR) looked better to the upside in its consolidation and Emerging Markets ($EEM) were biased to the downside in their broad consolidation.
Volatility ($VXX) looked to remain subdued keeping the bias higher for the equity index ETF’s $SPY, $IWM and $QQQ. Their charts showed a mixed bag with consolidation in the uptrends on the longer timescale, with the IWM the strongest, while on the shorter timeframe the IWM and QQQ might reverse higher with the SPY still looking vulnerable.
The week played out with Gold starting lower before rebounding to end the week near flat while Crude Oil pulled back slightly but remained in its consolidation. The US Dollar inched back higher while Treasuries held in a narrow range but slightly higher. The Shanghai Composite pushed to new highs while Emerging Markets finally found a bid and started higher.
Volatility bounced around a bit but stayed mired in and among the SMA’s. The Equity Index ETF’s started the week higher but as it went on the SPY and QQQ gave back most of the gains, while the IWM held in place after the initial move. What does this mean for the coming week? Lets look at some charts.
SPY Daily, $SPY
The SPY started the week with a nice gap up over the 50 day SMA and then a run to close over the 20 day SMA. That was the extent of the good news for the week. From there it pulled back, closing the gap and printing a Hammer candle Wednesday. That was confirmed as a reversal when it moved higher Thursday. At the end of the week there was a doji print above last week’s level. The RSI on the daily chart continues to hold in the bullish zone, barely, while the MACD continues to push lower. A bit of a mixed picture on this timeframe.
On the weekly chart the doji continues to hold at the elevated support level within the consolidation box that started in October. The Bollinger Bands® continue to tighten as the RSI holds over the mid line, but the MACD falls. Mixed here too, but let’s watch the Bollinger Bands as they suggest a move soon. There is support at 204.40 and 203 followed by 202 and 200. Resistance higher stands at 208 and 209 before 210.25 and 212.25. Sideways Consolidation in the Long Term Uptrend.
SPY Weekly, $SPY
Heading into the first week of April the Equity markets are mixed with the IWM strong but the SPY and QQQ weaker and maybe ready for some short term downside. Elsewhere look for Gold to bounce around 1200 as it consolidates while Crude Oil churns back in its consolidation channel. The US Dollar Index should generally move sideways but with an upward bias while US Treasuries are biased lower short term in their consolidation.
The Shanghai Composite looks very strong and Emerging Markets are getting jealous, and trying to join it to the upside. Volatility looks to remain subdued keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts point to consolidation or even a downside bias for the SPY and QQQ, while the IWM seem the place to be, holding up well at the all-time highs. Use this information as you prepare for the coming week and trad’em well.
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Gregory W. Harmon CMT, CFA, has traded since 1986 and held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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