SPY Trends and Influencers March 27, 2021

Last week’s review of the macro market indicators saw with the March Quad Witching in the books, equity markets continued to show signs of strain. Elsewhere looked for Gold ($GLD) to continue its pullback while Crude Oil ($USL) pulled back in its uptrend. The US Dollar Index($DXY) was on the verge of a reversal to the upside while US Treasuries ($TLT) continued to move lower. The Shanghai Composite ($ASHR) looked to be on the edge of a reversal lower while Emerging Markets ($EEM) pulled back in their uptrend.

The Volatility Index ($VXX) looked to remain low making the path easier for equity markets to the upside. Their charts however were showing signs of fatigue on the shorter timeframe, with the $QQQ the weakest. On the longer timeframe both the $SPY and the $IWM remained strong but in a pause with the QQQ consolidating over support after a small pullback.

The week played out with Gold bouncing around in a range perhaps building a short term bull flag while Crude Oil continued to pullback in its uptrend. The US Dollar made a higher high confirming the reversal to the upside while Treasuries bounced after the full retracement of the move off the 2019 base. The Shanghai Composite found support as it hit its 200 day SMA and reversed while Emerging Markets continued lower towards a retest of the long term base break area.

Volatility fell back, closing below 20 for the first time since the pandemic began. Despite this, equities came under pressure after the start of the week and moved lower. All found support by Thursday and reversed to finish the week. This resulted in the SPY racing towards the all-time highs and the QQQ up slightly with the IWM lower, unable to recover the earlier losses. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week pulling back from an all-time high but holding over its 20 day SMA. It held higher Monday but then drifted lower as the week wore on with late day selling each day. Thursday that reversed with sellers in the morning giving way to buyers into the close, making for a positive day. Friday repeated that pattern with less selling early and more late buying to end the week higher.

The end of day move Friday was on strong volume, what you want to see in an uptrend.  The daily chart shows the RSI turning back up after touching the mid line and the price the 50 day SMA. This was also the 138.2% extension of the retracement of the pandemic drop. The MACD is also turning up towards a cross and is positive.

The weekly chart shows price back at weekly resistance. The RSI on this timeframe is flat but strong in the bullish zone with the MACD slowly resetting lower. There is resistance above at 397. Support comes lower at 395 and 393 then 389 and 386 before 381.25 and 375.50. Uptrend Resumes.

SPY Weekly, $SPY

Heading into the shortened week and the end of the 1st Quarter, equity markets showed resilience with a rebound from a mid-week dive. Elsewhere look for Gold to possibly reverse out of its pullback while Crude Oil consolidates in its digestive move. The US Dollar Index has turned to a short term trend to the upside while US Treasuries bounce in their downtrend. The Shanghai Composite continues to pullback in the uptrend while Emerging Markets look close to a long term breakout retest as they pullback.

The Volatility Index looks to remain low and close to filling the pandemic gap, making the path easier for equity markets to the upside. Their charts look strong on the longer timeframe, but there is a clear ranking emerging with the SPY strongest and moving higher, the IWM with a possible broadening top and the QQQ holding support after a digestive pullback. On the shorter timeframe both the IWM and the QQQ also look weaker than the SPY as they show short term trends lower while the SPY attacks the all-time high. Use this information as you prepare for the coming week and trad’em well.

Join the Premium Users and you can view the Full Version with 20 detailed charts and analysis: Macro Week in Review/Preview March 26, 2021  

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

blog comments powered by Disqus
Dragonfly Caps Blog