SPY Trends and Influencers November 13, 2021

Last week’s review of the macro market indicators saw with the first week of November in the books, that equity markets showed great strength with all major indexes finishing at all-time highs. Elsewhere looked for Gold ($GLD) to continue a short term uptrend while Crude Oil ($USL) pulled back in its uptrend. The US Dollar Index ($DXY) continued on the verge of a reversal higher while US Treasuries ($TLT) continued in a short term uptrend. The Shanghai Composite ($ASHR) looked to consolidate while Emerging Markets ($EEM) consolidated over long term support.

The Volatility Index ($VXX) looked to remain very low 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 printed possible reversal candles and both were extended. The $IWM took the lead though as it broke a 9 month consolidation higher.

The week played out with Gold continuing to move to the upside while Crude Oil bounced in consolidation at the recent highs. The US Dollar also moved higher, rounding out of a bottom, while Treasuries met some resistance in their move up and pulled back. The Shanghai Composite started a move higher out of consolidation at the end of the week while Emerging Markets moved slightly higher in consolidation.

Volatility pressed higher early in the week but fell back Thursday to end little changed on the week. This put initial pressure on equities and they responded by starting the week with a 2 day move lower. All found support by late Wednesday and reversed with the SPY and QQQ following through Friday. This resulted in the SPY, IWM and QQQ ending the week slightly off their fresh all-time highs. 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 and in a 7 day win streak. It added an eighth day Monday and then went on a 2 day pullback. It held in place Thursday and then resumed the path higher Friday. This brought the price back closer to the 20 day SMA on the daily chart. It also reset the RSI out of overbought territory. The MACD stopped short of a cross down, kissing the signal line with the Bollinger Bands® tightening. The reversal gives a target on a Measured Move to 480.

The weekly chart shows the price action as the first down week in the last 6 but not by much. This brought the price back closer to being inside the Bollinger Bands. The RSI is into overbought territory on this timeframe but barely so and running flat. The MACD is crossed up and rising. There is resistance higher at 470. Support lower comes at 463.60 and 460 then 457.70 and 454 before 450 and 447. Uptrend.

SPY Weekly, $SPY

Heading into the November options expiration week, equity markets showed resilience reversing an early week plunge. Elsewhere look for Gold to continue its new uptrend while Crude Oil consolidates at the recent highs. The US Dollar Index also looks to continue its breakout higher while US Treasuries consolidate in their bounce. The Shanghai Composite looks to continue to churn sideways while Emerging Markets consolidate in a bull flag over long term support.

The Volatility Index looks to remain very low making the path easier for equity markets to the upside. Their charts look strong, especially on the longer timeframe. On the shorter timeframe both the QQQ and SPY look to have reversed a small pullback while the IWM still needs to trigger. Use this information as you prepare for the coming week and trad’em well.

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