SPY Trends and Influencers April 26, 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 May options cycle that the equity markets were mixed. Elsewhere looked for Gold ($GLD) to continue lower while Crude Oil ($USO) continued to move up. The US Dollar Index ($UUP) seemed ready to move sideways or pullback while US Treasuries ($TLT) were biased higher. The Shanghai Composite ($SSEC) and Emerging Markets ($EEM) were both in consolidation mode with the Chinese market looking better lower and Emerging Markets biased to the upside. Volatility ($VIX) looked to remain low keeping the bias higher for the equity index ETF’s $SPY, $IWM and $QQQ, and potentially signaling for a new all-time high to come in the S&P 500. The equity Index ETF’s themselves painted a mixed picture with all rising on the short term, but the SPY the strongest and back at the consolidation zone, while the IWM and QQQ still with a lot of work to do to remove the intermediate term downward bias.

The week played out with Gold continuing lower before finding support and rebounding to end the week up while Crude Oil found resistance and pulled back. The US Dollar moved sideways as Treasuries rose. The Shanghai Composite fell back and so did Emerging Markets. Volatility found a bottom and rebounded slightly. The Equity Index ETF’s all started the week well but ended worse, with none of them making a higher high in the process. 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 higher, continuing the action from last week, but turned lower by Friday, ending the week negative. The price action failed to make a new high, leaving a lower high, and sitting on support of the 20 and 50 day SMA. There is no serious damage yet, despite what you might read about or hear on television, but the short term trend is definitely not up, rather sideways and maybe turning down. The daily chart shows the RSI turning lower but still over the mid line with the MACD flat after a bounce. Out on the weekly view the sideways action is more evident. Another candle with an upper shadow suggests some topping. And the weekly was a narrow range 7 candle (smallest range in 7 weeks), often a signal for a move to happen imminently. The RSI on the weekly chart is making lower highs as it pulls back. But there is still a possible RSI Positive Reversal if price does not make a new lower low below the February level. The MACD is also rolling down, supporting the downside. There is support lower at 185 and 183.80 followed by 181.30-181.50 and 180.25 before 177.60. Resistance higher is found at 186.75 and 188.45 before 189 and 189.70. Short Term Downside in the Intermediate Consolidation in the Uptrend.

As the markets close out April equities are looking weak. Elsewhere look for Gold to continue higher while Crude Oil takes a breather and retreats. The US Dollar Index looks better lower while US Treasuries are biased lower in the uptrend. The Shanghai Composite and Emerging Markets both are biased to the downside in the short term with the risk of both just consolidating. Volatility looks to remain low keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ, despite the moves lower. Their charts suggest that the short term will feel some more pain with the QQQ weakest followed by the IWM and then the SPY. Use this information as you prepare for the coming week and trad’em well.

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