SPY Trends and Influencers February 15, 2014

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 week that the markets were giving a sigh of relief but not as strong as they could be. It looked for Gold ($GLD) to continue to consolidate with a slight upward bias while Crude Oil ($USO) continued higher. The US Dollar Index ($UUP) seemed content to continue to move sideways while US Treasuries ($TLT) were biased higher in the very short term in their broad consolidation. The Shanghai Composite ($SSEC) and Emerging Markets ($EEM) were biased to the upside with the Emerging Markets warranting some caution initially. Volatility ($VIX) looked to remain subdued and biased lower adding a breeze to the backs of the equity index ETF’s $SPY, $IWM and $QQQ. Their charts showed a desire for some short term caution to prove the recent moves hold, although the tone was bullish. The QQQ looked the strongest followed by the SPY and then the IWM.

The week played out with Gold pushing higher while Crude Oil consolidated around the round number 100. The US Dollar broke the sideways motion lower while Treasuries consolidated their recent move lower. The Shanghai Composite and Emerging Markets both moved higher, with Emerging Market still not out of trouble. Volatility made a move back lower, continuing last weeks fall after some early consolidation. The Equity Index ETF’s showed strength, continuing the move higher. 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 promising look after the push higher into the prior consolidation zone. The potential Evening Star candle on Monday at the falling 20 day SMA kept the caution flags up, but they were tossed aside later in the week with the bullish engulfing candle on Thursday and confirmed higher Friday. This chart looks headed for new all time highs again. The RSI on the daily chart is rising and bullish along with the MACD, both supporting more upward price action. The Measured Move targets 194.12 higher and there is resistance at 185 along the way. On the weekly view the strong near Marubozu candle confirmed the Hammer from last week higher. The RSI on this timeframe is moving back up, but never turned bearish, while the MACD is leveling, perhaps for a turn higher as well. Also bullish on this timeframe. Support lower comes at 181.80 and 177.50 followed by 175 and 173.60-173.75. Continued Upward Price Action.

Heading into the holiday shortened President’s week the equity markets are looking strong. Elsewhere look for Gold to continue in its uptrend while Crude Oil remains biased higher as it consolidates. The US Dollar Index looks better to the downside while US Treasuries look to be consolidating again. The Shanghai Composite and Emerging Markets are biased to the upside now. Volatility looks to remain subdued keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ, despite their strong moves higher this week. Their charts also look better higher with the QQQ and SPY perhaps a bit stronger looking than the IWM. Use this information as you prepare for the coming week and trad’em well.

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