SPY Trends and Influencers September 11, 2011

• Posted by Greg Harmon
• on September 11th, 2011

Last week’s review of the macro market indicators looked like the moves that revealed themselves the previous Friday would continue. Gold ($GLD) and US Treasuries ($TLT) were ready to continue higher. Crude Oil ($USO) looked poised to drop further and the US Dollar Index ($UUP) to move sideways in the top of its range. The Shanghai Composite ($SSEC) and Emerging Markets ($EEM) looked to continue lower. Volatility ($VIX) looked to remain elevated with the US Equity Index ETF’s $SPY, $IWM and $QQQ ready to continue lower in their bear flags. US Treasuries breaking out and Gold racing higher again could be the catalyst for a break of the bear flags lower.

The week began Gold making a new high before pulling back to consolidate, US Treasuries gapped higher and held there. Crude Oil held narrow range between 86 and 90 while the US Dollar Index marched to the top of the range and then peaked out. The Shanghai Composite and Emerging Markets did move lower but with a mid week blip higher for Emerging Markets. Volatility did hold higher with and the Equity Index ETF’s remained lower, but still in their bear flags. What does this mean for the coming week? Lets look at some charts.

As always you can see details of individual charts and more on my StockTwits feed and on chartly.)

US Dollar Index Weekly, $UUP

After peaking over the channel Thursday, the US Dollar Index Futures (above) broke the channel higher Friday. It has a RSI that raced higher all week and is strongly in bullish territory, and a MACD that is increasing on the daily chart. The weekly view shows a vault over the resistance area, moving over the Fibonacci Fan line and rising strongly towards the next line and the 50 week Simple Moving Average (SMA). The RSI on this timeframe moved steeply higher and the MACD jumped higher. Look for continued movement to the upside in the coming week with resistance higher at 22.20 and 22.66 as it heads to the channel breakout target of 22.85 near the 100 week SMA. As with any breakout, a retest of the channel at 21.80 is possible and a move below it has support at 21.40 and 20.88.

SPY Daily, $SPY

SPY Weekly, $SPY

The SPY continued in the bear flag this week moving back lower after rejecting a retest at the 38.2% Fibonacci level from the broad move lower. It has a RSI that also rejected at the mid line and is heading lower on the daily chart and a MACD that continues to fade. The weekly chart shows the RSI bounce off of the 30 level fading back towards it and the MACD remaining negative. The downtrend remains for next week. If it breaks the flag lower under 115.30 there is support at 111.15 and 104 on the way to a target of 95-100. Any upside should find resistance over 121.50 at 123.30. Above that the trend may be changing.

The coming week looks positive for US Treasuries and the US Dollar Index. Gold looks to continue to be biased higher and Crude Oil lower, but both may also continue in the respective bull and bear flags. The Shanghai Composite and Emerging Markets continue to favor the downside. Volatility looks to remain elevated with a bias towards heading higher. This backdrop suggests favoring a downside bias in the US Equity Index ETF’s SPY, IWM, and QQQ. They may continue to hold their bear flags but a big push higher in the US Dollar Index and US Treasuries are likely to push Volatility higher out of its range and lead to the Equity flags breaking lower. Use this information as you prepare for the coming week and trade’m well.

Full Version with 20 detailed charts and analysis: Macro Week in Review/Preview September 10, 2011

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