SPY Trends and Influencers June 21, 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 June Options Expiration week that it saw the equity markets with a preference for some consolidation. For next week looked for Gold ($GLD) to bounce higher in its intermediate downtrend while Crude Oil ($USO) consolidated or pulled back in its uptrend. The US Dollar Index ($UUP) looked to continue to move sideways while US Treasuries ($TLT) consolidated in the uptrend. The Shanghai Composite ($SSEC) and Emerging Markets ($EEM) were biased to the upside with risk that the Chinese market just moves sideways. Volatility ($VIX) looked to remain subdued keeping the bias higher for the equity index ETF’s $SPY, $IWM and $QQQ. Their charts showed that the short term downside might continue, but it may be short lived with all biased higher in the intermediate trend.

The week played out with Gold starting slow but accelerating higher to end the week while Crude Oil continued the pullback. The US Dollar moved slightly if at all while Treasuries continued to consolidate and show signs of falling. The Shanghai Composite capped out Monday and pulled back the rest of the week while Emerging Markets traded in a tight range. Volatility made a feeble attempt higher Monday before ending with new 7 year lows. The Equity Index ETF’s responded by moving higher, with the SPY making new all-time highs, the IWM a 2 month high and the QQQ new 14 year highs. 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 consolidating after the pullback from the prior week. But by Tuesday it started to peek higher, taking off Wednesday and consolidating to end the week just off of the new all-time highs. The 20 day SMA is very close by and the RSI is in the bullish zone and pulling back while the MACD is flat. Translation: there is nothing overbought about this level. The candles Thursday and Friday though confirm an Evening Star reversal. On the weekly chart the smaller body move higher looks positive. The RSI on this timeframe is holding near 70 and the MACD is rising. The bullish view wins on this timeframe as price rides the opening upper Bollinger band higher. There is support at 195.10 and 193 followed by 190.42. There is no resistance over the top Thursday at 196.60 but a target on a Measured Move to 197.30 and then one at 202.50. The round number 200 in between could also stall it. Possible Consolidation in the Uptrend.

As the last full week of June kicks off into Summer, the equity markets look strong. Elsewhere look for Gold to continue higher while Crude Oil joins it to the upside. The US Dollar Index has a short term downward bias while US Treasuries consolidate but also are biased lower. The Shanghai Composite looks like it has more consolidation in store for it while Emerging Markets are biased to the upside with possible consolidation. Volatility looks to remain very low keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts are also biased to move higher on the longer timeframe with the shorter timeframe strongest in the IWM and with the SPY and QQQ looking like they could consolidate in the short term. Use this information as you prepare for the coming week and trad’em well.

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