SPY Trends and Influencers December 24, 2021

Last week’s review of the macro market indicators saw with the December Quadruple Witching in the books, equity markets showed some weakness. Elsewhere looked for Gold to continue its consolidation while Crude Oil consolidated as well. The US Dollar Index looked to pause in the uptrend while US Treasuries consolidated. The Shanghai Composite looked to continue in consolidation as well while Emerging Markets continued to move lower.

The Volatility Index looked to remain in the normal range easing the pressure on equity markets. Their charts looked vulnerable on the shorter timeframe. On the longer timeframe both the QQQ and SPY looked stronger while all three, including the IWM, remained in consolidation.

The week played out with Gold remaining in a tight range in consolidation while Crude Oil pushed up through resistance to end the week. The US Dollar also held in a tight range while Treasuries fell back from resistance at the end of their week. The Shanghai Composite found support and started higher in consolidation while Emerging Markets found support and rose through the week.

Volatility spiked higher at the open Monday but then fell back all week to end at 1 month lows. This put initial pressure on equities and they responded with a move lower at the open Monday. All found support and reversed moving to finish the week higher. This resulted in the SPY and QQQ ending back near all-time highs with the IWM in the middle of long term consolidation. 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 a failed break out. It gapped down Monday and continued lower to touch the 100 day SMA for the first time since early October where it found support and reversed. It closed with a doji Hammer candle on the daily chart and confirmed it as a reversal with a move higher Tuesday. It continued higher the rest of the week to end within pennies of the all-time high close. The RSI is rising from the midline in the bullish zone with the MACD about to cross up and positive. The Bollinger Bands® are flat but there is still room above to the top of them.

The weekly chart shows a building 2 month consolidation under resistance, with a strong weekly candle. The Bollinger Bands on this timeframe are pointing higher. The RSI is holding in the bullish zone with the MACD drifting lower but positive. There is no resistance above 471. Support lower comes at 470 and 466 then 463.50 and 460 before 474 and 454 then 450. Consolidation in Uptrend.

SPY Weekly, $SPY

With only 1 week left in 2021, equity markets showed strength with a rebound from an ugly start. Elsewhere look for Gold to continue its consolidation while Crude Oil drifts towards the top of a consolidation range. The US Dollar Index continues to consolidate in the uptrend while US Treasuries mark time sideways. The Shanghai Composite looks to continue in consolidation as well while Emerging Markets continue lower.

The Volatility Index looks to remain at normal levels making the path easier for equity markets to the upside. Their charts look strong, especially on the shorter timeframe. On the longer timeframe both the QQQ and SPY continue to show strength in consolidation, while the IWM flounders in the middle of the yearlong consolidation range. 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 December 23, 2021  If you like what you see sign up for more ideas and deeper analysis using the Get Premium button above.   Special Holiday Pricing going on now.

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