SPY Trends and Influencers: Monthly Edition October into November 2013
- Posted by Greg Harmon
- on November 1st, 2013
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 the last Quarter of the year the looking strong for equity markets, maybe a little overbought if you need to find something wrong with them. It outlook suggested that Gold ($GLD) would continue to consolidate within the downtrend while Copper ($JJC) also consolidated with a upward bias. Crude Oil ($USO) looked to continue the broad consolidation but with a downward bias while Natural Gas ($UNG) looked slightly better higher in the short run within the downtrend. US Treasuries ($TLT) might continue to consolidate in the downtrend while the US Dollar Index ($UUP) looked better to the downside. The Shanghai Composite ($SSEC) might continue to bounce in the downtrend while Emerging Markets ($EEM) consolidated with an upward bias as the German DAX ($DAX) just went higher. Volatility ($VIX) looked to remain low giving a tailwind to equity markets higher. Their charts showed they all had an upward bias with the $IWM and $QQQ strongest and the $SPY lagging. How does an additional month impact the longer term picture? Let’s look at some charts.
The SPY continued the move higher along the line denoting the middle of the bullish Andrews’ Pitchfork. It is now moving firmly towards the Upper Median Line and on to uncharted new highs. The Relative Strength Index (RSI) is traveling sideways along the technically overbought level at 70, no where near extreme levels and the MACD is rising. Both support more upside price action. The next extension higher is at 189.12. Support lower comes at 169.70 and 164.25 followed by 155. Continued Upside.
The monthly outlook suggests the markets are strong but may be getting extended in some sectors. It looks for Gold and Copper to continue to move sideways with the bias for Gold lower and for Copper higher. Crude Oil looks to be biased lower going forward while Natural Gas flounders with an upside bias. US Treasuries are set up to move higher if they break consolidation while the US Dollar Index looks weak and is biased lower. In the foreign markets the Shanghai Composite remains biased lower while Emerging Markets drift higher in consolidation and the German DAX is strong and looks to move higher. Volatility looks to continue to play no role in the market keeping the wind at the backs of equities. The equity index charts look strong in their uptrends but the QQQ is getting a bit overbought and may need to consolidate, while the SPY and IWM are not yet extended, but worth tighten the leash. Use this information to understand the long term trends in Equities and their influencers as you prepare for the coming months.
For complete analysis of the 13 markets summarized here join the premium service and read Macro Month in Review/Preview October into November 2013 or send me an e-mail requesting a special Macro package.
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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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