SPY Trends and Influencers September 28, 2013
- Posted by Greg Harmon
- on September 28th, 2013
A weekly excerpt from the Marco Review analysis sent to subscribers on 10 markets and two timeframes.
Last week’s review of the macro market indicators suggested, as we headed into the last full week of the Quarter that the equity markets looked ready to absorb their latest highs. It looked for Gold ($GLD) to continue lower while Crude Oil ($USO) continued to consolidate with a downward bias. The US Dollar Index ($UUP) was pushing lower while US Treasuries ($TLT) looked to continue to consolidate in the downtrend with a short term bias higher. The Shanghai Composite ($SSEC) and Emerging Markets ($EEM) were poised to continue to the downside in their uptrends and the Volatility Index ($VIX) looked to remain subdued keeping the bias higher for the equity index ETF’s $SPY, $IWM and $QQQ. Their charts were suggesting they needed to consolidate or pullback from the new highs first though.
The week played out with Gold basically running in place while Crude Oil broke lower. The US Dollar held lower, consolidating sideways while Treasuries moved up to test resistance. The Shanghai Composite and Emerging Markets continued lower, the latter finding the 200 day moving average. Volatility crept higher but remained subdued. The Equity Index ETF’s were mixed with the SPY pulling back but the QQQ and IWM consolidating. What does this mean for the coming week? Lets look at some charts.
The SPY continued the pullback this week, but slowed the pace to a crawl. It ended Friday on the 20 day SMA and within the support zone of 168.85-169.35. There is a gap below though that remains unfilled to 167.73. The move lower has achieved the first target from the bearish Shark at 169.57 with the next target lower at 167.08, which would fill that gap. The RSI is bouncing along the mid line with the MACD crossed lower on the daily chart, both supporting more downside. On the weekly view the red candle for the week confirms the Shooting Star from last week lower, but it also closed the gap. The RSI is bouncing lower from lower highs but with a MACD that is level. There is support lower at 167.70 and 166 followed by 165.15 and 164.50 before 163.35. Resistance higher is found at 170 and 170.97 before 172.33 and 173.60. Continued Pullback in the Uptrend.
As the 3rd Quarter comes to a close the markets look positive but softer on a short term basis. Next week look for Gold consolidate or move higher while Crude Oil continues lower. The US Dollar Index looks to continue its downward action while US Treasuries are biased higher near resistance. The Shanghai Composite and Emerging Markets are moving together and continue to look best to the downside. Volatility looks to remain subdued but with a drift higher keeping the bias neutral to higher for the equity index ETF’s SPY, IWM and QQQ. The SPY looks the weakest of the bunch and better lower while the IWM and QQQ consolidate in their uptrends. 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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