SPY Trends and Influencers April 8, 2023

• Posted by Greg Harmon
• on April 8th, 2023

Last week, the review of the macro market indicators saw with the first Quarter of 2023 in the books, equity markets showed strength as they closed out with a strong move to the upside. Elsewhere looked for Gold ($GLD) to continue its consolidation in the uptrend while Crude Oil ($USO) continued a short term move higher. The US Dollar Index ($DXY) continued to move to the downside while US Treasuries ($TLT) consolidated after the long move lower.

The Shanghai Composite ($ASHR) looked to continue in consolidation while Emerging Markets ($EEM) joined in with their own consolidation. The Volatility Index ($VXX) looked to remain in the normal range and stable making the path easier for equity markets to the upside. Their charts were mixed, with the $SPY and $QQQ looking strong on both the short and long timeframe. The $IWM however remained in consolidation.

The week played out with Gold popping up over 2000 and testing its all-time high while Crude Oil also gapped higher, over $80 per barrel and held there. The US Dollar dropped back to the January lows before an end of the week bounce while Treasuries moved higher all week. The Shanghai Composite rose out of consolidation to approach the March high while Emerging Markets continued to grind under resistance.

The Volatility Index remained in the high teens, closing ending at a 7 week low. Despite the continued positive environment this provided equities held in a narrow range as they awaited news on the employment situation. The one exception was the small cap index IWM that moved lower. The SPY and QQQ ended slightly lower, but looking positive for the future. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week looking strong and moving higher off a higher low. It continued Monday and then stalled and pulled back Tuesday as it dropped from the upper of the Bollinger Bands®. Those Bollinger Bands are opening higher. It continued lower Wednesday, building the start of a bull flag before a move higher again Thursday. It ended the week slightly lower. The daily chart shows the RSI is holding in the bullish zone with the MACD positive and rising.

The weekly chart shows a doji candle print at the high from last week. This indecision candle is also below the prior high from January. A reversal here would not be good news for bulls. The RSI on this timeframe is stuck around the midline with the MACD rising and positive. There is resistance at 411 and 413.50 then 417.50 and 420 before 423. A move over 417.50 would likely bring in more buyers. Support lower comes at 407.50 and 405.50 then 403.50 and 400.50 before 397.50. Uptrend Continues.

SPY Weekly, $SPY

With the first week of April in the books, equity markets were mixed with the large caps and tech focused indexes digesting gains while the small caps took a blow to the body. Elsewhere look for Gold to continue its uptrend while Crude Oil consolidates the renewed move higher. The US Dollar Index looks to continue to move lower while US Treasuries test the top of broad consolidation. The Shanghai Composite looks to also test the top of consolidation while Emerging Markets continue sideways.

The Volatility Index looks to remain stable and low making the path easier for equity markets to the upside. The charts of the SPY and QQQ remain strong on the longer timeframe while on the shorter timeframe both remain in short term consolidation. The IWM remains weaker holding in consolidation after a failed short term move higher. Use this information as you prepare for the coming week and trad’em well.

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