SPY Trends and Influencers December 21, 2013

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 the last full week before the Holidays, that the markets were looking tired and extended and better lower. It looked for Gold ($GLD) to continue lower while Crude Oil ($USO) turned the bias to lower in the short term. The US Dollar Index ($UUP) was trending lower but might be ready for a bounce while US Treasuries ($TLT) were biased lower. The Shanghai Composite ($SSEC) was consolidating in the upward move and Emerging Markets were biased to continue to the downside. Volatility ($VIX) looked to remain subdued but with an upward bias keeping the bias higher for the equity index ETF’s $SPY, $IWM and $QQQ. Their charts suggested that there may be more downside for the QQQ and SPY, which were both at support, while the IWM crept along trend support higher in what could still be a bear flag.

The week played out with Gold falling hard before a bounce to end the week while Crude Oil made a higher low and recovered. The US Dollar did bounce after a wide range day while Treasuries held at the lows. The Shanghai Composite marched lower and Emerging Markets continued to flounder with a downward drift. Volatility made a strong move lower, reversing the last week’s rise. The Equity Index ETF’s reacted by finding support and with the SPY and IWM making new all-time highs intraday and the QQQ new 13 year 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 d
SPY Weekly, $SPY
spy w

The SPY started the week with a small bounce off of the support area since early November only to accelerate following the Federal Reserve decision Wednesday and end the week at the top of the current range. Technically speaking it made a new all-time high on the intraday basis, actually showing great strength Friday as it has to overcome a 98 cent dividend to as well. The prognosis is positive as well with the RSI holding over 60, in bullish territory with a MACD that is moving higher and just about to cross, giving a buy signal. The weekly chart shows consolidation continuing for the 5th week at the high levels and a recovery of last week’s red candle with a bullish engulfing candle. The RSI on this timeframe is moving back higher and the MACD is avoiding a cross down, both supporting the upside. Notice that the SMA’s are all rising on both timeframes, also bullish. There is support lower at 180.40 and 178.50 before 177.50. Under that and we could get a pullback or correction. Resistance is at 181.99 now, Friday’s high, and then there are consolidation break targets at 186 and 190. Upward Bias with Continued Consolidation Possible.

Heading into the Christmas Holiday week, the markets have regained some strength. This week look for Gold to continue lower while Crude Oil keeps moving higher. The US Dollar Index is looking better to the upside while US Treasuries are biased lower but in consolidation. The Shanghai Composite and Emerging Markets are biased to the downside with risk of the Chinese market turning very ugly. Volatility looks to remain subdued keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their individual charts suggest more upside with the IWM looking strongest, followed by the SPY. The QQQ has a strong trend but remains a bit extended. 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 December 20, 2013


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