SPY Trends and Influencers: Monthly Edition March into April 2014
- Posted by Greg Harmon
- on March 1st, 2014
A monthly excerpt from the Premium subscriber version covering all 13 markets.
Last month in this space my Monthly Macro Review/Preview had the monthly outlook heading into March suggested the equity markets had broken their consolidation to the upside and wanted more. Gold ($GLD) had committed to consolidation joining Copper ($JJC). Crude Oil ($USO) looked to continue to drift higher and Natural Gas ($UNG) was also biased to the upside, but with some caution now. US Treasuries ($TLT) looked to continue their bounce in the recent consolidation while the US Dollar Index ($UUP) drifted sideways with a downward bias. The Shanghai Composite ($SSEC) looked weak in its downtrend and Emerging Markets ($EEM) looked to continue their broad consolidation in the lower part of a channel while the German DAX ($DAX) wanted more upside. Volatility ($VIX) looked to remain low, helping US Equities. The Equity Index ETF’s $SPY, $IWM and $QQQ looked ready for a move higher following the short consolidation. How does an additional month impact the longer term picture? Let’s look at some charts.
The SPY followed last months peek above consolidation with a small move higher. The top near 189 was a 127% extension of the financial crisis move lower and it has the RSI technically overbought, but barely so and moving sideways. The MACD continues to rise. These are very bullish. A push above 189 sees a 138.2% extension near 200 above as it closes in on the Upper Median Line of the bullish Pitchfork. Support lower is found at 175 and 170 below that. Continued Upward Price Action.
The monthly outlook heading into April suggests the equity markets are a bit mixed with the SPY the strongest. Gold looks to continue in the consolidation zone while Copper moved back into its consolidation zone as well after a peek below. Crude Oil continues to consolidate with an upward bias and Natural Gas is pulling back in the uptrend. The US Dollar continues to be uninspiring moving sideways while US Treasuries are at a critical juncture with April’s movement possibly setting a longer trend. In foreign markets the Shanghai Composite looks to continue its long path lower with the German DAX consolidating before showing its next move. Emerging Markets continue it eh lower half of their broad consolidation range. Volatility looks to remain low giving equities a favorable environment. The equity charts themselves show the SPY pushing higher out of consolidation, while the IWM and QQQ consolidate with a stronger possibility of reversal. Use this information to understand the long term trends in Equities and their influencers as you prepare for the coming months.
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Gregory W. Harmon CMT, CFA, has traded since 1986 and held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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