SPY Trends and Influencers February 11, 2023

• Posted by Greg Harmon
• on February 11th, 2023

Last week’s review of the macro market indicators saw with the first month of the year in the books with positive performance, statistically the prospects for a positive year were good, while near term markets also looked strong. Elsewhere looked for Gold (GLD) to pause in its uptrend while Crude Oil (USO) dropped to the low end of the consolidation range. The US Dollar Index ($DXY) looked to pause in the downtrend while US Treasuries ($TLT) consolidated in their bounce off lows. The Shanghai Composite ($ASHR) looked to pause its uptrend while Emerging Markets ($EEM) might pause their move higher as well.

The Volatility Index ($VXX) looked to remain normal and stable making the path easier for equity markets to the upside. Their charts looked strong, especially on the longer timeframe with the $SPY confirming an intermediate term uptrend while the $IWM and $QQQ had established short term uptrends and were closing in on the intermediate term. On the shorter timeframe the SPY, IWM and QQQ all moved back within the Bollinger Bands Friday to ease tight momentum.

The week played out with Gold running sideways until a move lower Thursday that held Friday while Crude Oil bounced higher in consolidation. The US Dollar moved slightly higher while Treasuries moved back lower. The Shanghai Composite continued to build a bull flag while Emerging Markets moved lower.

Volatility moved slightly higher in the normal range. This put pressure on equities and they fell back late in the week. The SPY, the IWM and the QQQ all built bull flags on the pullback and remained in bullish ranges. 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 higher high. It continued lower Monday and then recovered Tuesday back near the high. Wednesday and Thursday saw a move lower with a slight recovery Friday to end the week 1% lower. The price action in the daily chart built a bull flag over the 20 day SMA and down trending support. The RSI is holding in the bullish zone with the MACD rolling and about to cross down.

The weekly chart printed an inside week, repeating the pattern of two up weeks and then an inside consolidation, since the start of the year. The 100 week SMA continues to loom overhead with the RSI moving slightly higher but still short of a move into the bullish zone. The MACD however has turned positive. There is resistance at 411 and 413.50 then 417.50 and 420 before 423 and 425.50. Support lower sits at 407.50 and 405.50 then 403.50 and 400.50 before 397.50 and 394.50 then 391. Pause in Uptrend.

SPY Weekly, $SPY

Heading into the February options expiration, equity markets lost some of their strength, giving back some of the recent gains, but remained with a bullish bias. Elsewhere look for Gold to pause in its pullback while Crude Oil consolidates in a tight. The US Dollar Index continues to drift to the upside in the downtrend while US Treasuries consolidate after their bounce move. The Shanghai Composite and Emerging Markets both look to consolidate in their uptrends.

The Volatility Index looks to remain stable in the normal range making the path easier for equity markets to the upside. Their charts are building bull flags on the shorter timeframe, consolidating the moves up. On the longer timeframe the SPY, IWM and QQQ all continue to hold over the November highs showing some strength. Use this information as you prepare for the coming week and trad’em well.

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