SPY Trends and Influencers February 22, 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 holiday shortened President’s week saw the equity markets looking strong. Elsewhere it looked for Gold ($GLD) to continue in its uptrend while Crude Oil ($USO) remained biased higher as it consolidated. The US Dollar Index ($UUP) looked better to the downside while US Treasuries ($TLT) looked to be consolidating again. The Shanghai Composite ($SSEC) and Emerging Markets ($EEM) were biased to the upside now. Volatility ($VIX) looked to remain subdued keeping the bias higher for the equity index ETF’s $SPY, $IWM and $QQQ, despite their strong moves higher the previous week. Their charts also looked better higher with the QQQ and SPY perhaps a bit stronger looking than the IWM.

The week played out with Gold moving higher and consolidating while Crude Oil continued higher. The US Dollar drifted lower, finding a short term bottom while Treasuries fell back to the recent low. The Shanghai Composite continued higher testing resistance and Emerging Markets remained in a tight range. Volatility remained stable near the levels it ended last week. The Equity Index ETF’s moved slightly higher and consolidated, with the QQQ making a new high. 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 spent the week consolidating the move from the last two weeks, and just under the all time high. The daily chart shows a rolling of the RSI to flat, but in bullish territory with a MACD that is rising. This supports more upside. The weekly picture shows the consolidation as well, but with a Star. The prior top kept a lid on things through Options Expiration. The RSI though is bullish and rising and the MACD has stopped falling with the histogram improving. These are also positive supports. There is resistance at 185 and then a Measured Move that targets 195 to 196 measured two ways. Support lower comes at 183 and 181.80 followed by 180.40. Consolidation with an Upward Bias.

Heading into the last week of February the equity markets have recovered but need to make new highs to resume the path higher. Look for Gold and Crude Oil to continue higher next week. The US Dollar Index and US Treasuries look more neutral with the Dollar leaning lower. The Shanghai Composite may rest in the recent uptrend or even pullback while Emerging Markets look neutral in their short term uptrend. Volatility looks to remain subdued keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts share an upward bias but more decidedly so in the IWM, possibly the next leader in the rotation, with the SPY and QQQ a bit more cautious and consolidating. Use this information as you prepare for the coming week and trad’em well.

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