SPY Trends and Influencers March 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 March Options Expiration week and ahead of the widely expected invasion of the Ukraine the markets were jittery if not tired or weak. Specifically it looked for Gold ($GLD) to continue higher in its uptrend while Crude Oil ($USO) slowed in its pullback and might be ready to reverse higher. The US Dollar Index ($UUP) looked to continue lower while US Treasuries ($TLT) were biased higher and near a break of major resistance. The Shanghai Composite ($SSEC) and Emerging Markets ($EEM) were biased to the downside with a risk of the Chinese market consolidating and then a possible reversal. Volatility ($VIX) looked to remain low but moving higher cutting the breeze at the back of the equity index ETF’s $SPY, $IWM and $QQQ. Their charts suggested that the SPY and IWM are a bit stronger than the QQQ and may be ready to consolidate and reverse higher, while the QQQ is biased lower.

The week played out with Gold falling back to support while Crude Oil consolidated. The US Dollar found its footing and bounced while Treasuries ended nearly unchanged after a early pullback. The Shanghai Composite did consolidate while Emerging Markets bounced around in a tight range. Volatility made a move back lower, settling in among the Simple Moving Averages (SMA). The Equity Index ETF’s bounced off of the lows from last Friday, with the SPY making a new intra-day high, before they gave back most of it Friday. 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 higher, confirming the doji reversal candle from last Friday. The move Tuesday found resistance then at the top of the bearish engulfing candle from last week and consolidated there the rest of the week, until it briefly poked to a new all time high Friday. The RSI on the daily chart suggests that the bounce may be short lived, currently failing to reach the previous high, and the MACD only briefly blinking and then continuing lower. The weekly view shows an inside week on the real body, but broadly consolidation over the last 4 weeks at the highs. The RSI is holding over 60 and bullish while the MACD failed to cross higher. These suggest it may need some further consolidation. There is resistance at 188 and 189 and then a Measured Move higher to 193 and then 209. Support lower comes at 185 and 184 followed by 181.80. Consolidation in the Uptrend.

Heading into the last full week of the First Quarter the equity markets again look tired. Outside of them directly though look for Gold to consolidate or continue higher while Crude Oil has a similar feel for a reversal in its case. The US Dollar Index is showing strength in the short run while US Treasuries are consolidating tin the short term uptrend. The Shanghai Composite looks good for more upside price action and Emerging Markets look as if they may want to continue the consolidation. Volatility looks to remain subdued keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts are not so sure of that though with all 3 consolidating under the highs on the shorter timeframe but the IWM and SPY looking healthy, and a little better than the QQQ on the longer timeframe. Use this information as you prepare for the coming week and trad’em well.

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