SPY Trends and Influencers February 13, 2021

• Posted by Greg Harmon
• on February 13th, 2021

Last week’s review of the macro market indicators saw that heading into the second week of February, equity markets showed resilience as they rebounded from end of January sell off. Elsewhere looked for Gold ($GLD) to continue its pullback while Crude Oil ($USL) resumed its uptrend. The US Dollar Index ($DXY) was rounding out a bottom towards a reversal while US Treasuries ($TLT) continued in their downtrend. The Shanghai Composite ($ASHR) looked to continue the pullback in the uptrend while Emerging Markets ($EEM) were ready to attack new all-time highs.

The Volatility Index ($VXX) looked to have settled back to low levels making the path easier for equity markets to the upside. Their charts looked strong, especially on the longer timeframe. On the shorter timeframe both the $QQQ and $SPY did print indecision candles which might influence the short term. The $IWM looked ready to take the lead with a new leg higher.

The week played out with Gold pushing to the upside but but rolling over mid-week and dropping back while Crude Oil consolidated but saw late strength and moved higher Friday. The US Dollar lost its momentum and dropped back while Treasuries mounted a small bounce before ending at a new low. The Shanghai Composite drove to a new 5 year high during its holiday shortened week while Emerging Markets continued higher to record highs.

Volatility fell back to the December lows but still unable to close the gap up from a year ago. This should remove pressure on equities and they did respond by starting the week with a move higher. All found resistance by mid-week though and held in tighter ranges. This resulted in the SPY and QQQ ending back making all-time highs with the IWM slightly off its mid-week all-time high. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week at an all-time high and moving higher. It jumped up Monday and held Tuesday. The price bounced around in a tight range the next two days and for most of Friday until a buying surge late in the day. It closed the week at an all-time high again. The daily chart shows it at intraday resistance with the RSI rising in the bullish zone and the MACD positive and climbing.

The weekly chart shows continuation in the steady move higher. The RSI is strong in the bullish zone with the MACD rising and strong. The Bollinger Bands® are pointed higher and price is following the upper band. There is no resistance higher. Support lower comes at 386 and 381.25 then 375.50 and 372.50 before 369. Uptrend.

SPY Weekly, $SPY

Heading into the President’s Day weekend equity markets continue to look very strong. Elsewhere look for Gold to continue its pullback while Crude Oil moves to the upside. The US Dollar Index may be pausing in the downtrend while US Treasuries continue their trend lower. The Shanghai Composite looks to resume its uptrend after the Lunar New Year holiday while Emerging Markets continues to march to new all-time highs.

The Volatility Index looks to remain very low and drifting toward a pandemic gap fill, making the path easier for equity markets to the upside. Their charts continue to look strong, especially on the longer timeframe. On the shorter timeframe both the QQQ and SPY are moving back higher again while the IWM pauses to catch its breath over support. Use this information as you prepare for the coming week and trad’em well.

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