SPY Trends and Influencers April 30, 2022

• Posted by Greg Harmon
• on April 30th, 2022

Last week’s review of the macro market indicators saw with 1st Quarter earnings reports starting to pick up, equity markets were starting to turn ugly. Elsewhere looked for Gold ($GLD) to consolidate in its uptrend while Crude Oil ($USO) consolidated its move higher. The US Dollar Index ($DXY) continued to trend to the upside while US Treasuries ($TLT) trended lower. The Shanghai Composite ($ASHR) looked to continue to move lower along with Emerging Markets ($EEM).

The Volatility Index ($VXX) looked to remain elevated and possibly move higher still making the path harder for equity markets to the upside. Their charts looked weak, especially on the shorter timeframe with the $SPY, $IWM and $QQQ all closing at 5 week lows after two consecutive days of large moves lower. On the longer timeframe both the QQQ and SPY were also starting to look like the path lower is the easier route, while the IWM remained in the lower range.

The week played out with Gold dropping back to a 2 month low while Crude Oil continued to consolidate. The US Dollar continued to move higher while Treasuries found some support and consolidated. The Shanghai Composite found support mid-week and bounced while Emerging Markets also found support and rose, perhaps signaling a double bottom.

Volatility moved higher and then gave back some of that jump. This kept pressure on equities. Mixed earnings reports from the tech giants also played a role, whipping equity indexes back and forth on the week. This resulted in the SPY, the QQQ and the IWM all ending lower for the week. 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 hard from the 200 day SMA. It held and moved slightly higher Monday before a sharp move lower Tuesday. That was followed by 2 days of consolidation before a strong bearish move Friday, ending at the low of the day. It printed the lowest close in 11 months. The driving finish had price end outside of the Bollinger Bands® on the daily chart. The RSI is in the bearish zone with the MACD negative and dropping as it approaches the February intraday low.

The weekly chart shows a four week trend lower making a new weekly low as it approaches the 100 week SMA. The RSI on this timeframe is also into the bearish zone with the MACD negative and falling. Note that price has yet to retrace even 38.2% of the move up from the pandemic low to the top. There is support lower at 411 and 407.25 then 405.50 and 403.50 before a gap to fill to 400.70. Resistance higher sits at 413.75 and 417.40 then 420 and 423 before 425.50 and 428.50 then 430. Downtrend.

SPY Weekly, $SPY

With April in the books, equity markets are off to their worst start in over 80 years and in downtrends. Elsewhere look for Gold to continue the short term pullback while Crude Oil consolidates in its uptrend. The US Dollar Index continues a strong move higher but is at resistance while US Treasuries continue to trend lower. The Shanghai Composite looks to bounce in its downtrend while Emerging Markets continue to trend lower.

The Volatility Index looks to remain elevated and possibly continuing higher making the path easier for equity markets to the downside. Their charts also look strong, especially on the longer timeframe. On the shorter timeframe both the QQQ and SPY could us a reset on momentum measures as both are extended. If that happens it might be time for the IWM to take the lead. 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 April 29, 2022  

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