SPY Trends and Influencers April 15, 2023

• Posted by Greg Harmon
• on April 15th, 2023

Last week, the review of the macro market indicators saw 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 looked for Gold ($GLD) to continue its uptrend while Crude Oil ($USO) consolidated the renewed move higher. The US Dollar Index ($DXY) looked to continue to move lower while US Treasuries ($TLT) tested the top of broad consolidation.

The Shanghai Composite ($ASHR) looked to also test the top of consolidation while Emerging Markets ($EEM) continued sideways. The Volatility Index ($VXX) looked to remain stable and low making the path easier for equity markets to the upside. The charts of the $SPY and $QQQ remained strong on the longer timeframe while on the shorter timeframe both remained in short term consolidation. The $IWM remained weaker holding in consolidation after a failed short term move higher.

The week played out with Gold reaching resistance near the all-time high and then pulling back while Crude Oil moved up to the top of the range since November. The US Dollar found support at the February low while Treasuries fell back from a test at the top of the range since December. The Shanghai Composite consolidated at the highs for the year while Emerging Markets drifted up to a 2 month high.

The Volatility Index closed at the lowest level in 15 months. This took pressure off equities and they responded by starting the week with a 2 day move higher. Wednesday saw an afternoon setback upon release of the FOMC March meeting minutes, but this drop was wiped out with a strong move higher Thursday. Friday saw profit taking. This resulted in the SPY and IWM ending slightly higher on the week with the QQQ taking a small haircut. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week consolidating a move higher from a higher low. It held there on Monday before starting higher Tuesday. There was back and forth action Wednesday and Thursday, and then it held near the top of Thursday’s range Friday to close the week higher. It remains short of the February high though. The Bollinger Bands® on the daily chart are open to the upside with the RSI in the bullish zone and the MACD positive and rising.

The weekly chart shows an upside move out of last week’s indecision. The Bollinger Bands are open higher on this timeframe as well. The RSI is flat around the midline with the MACD positive and rising. There is resistance at 413.50 and 417.50 then 420 and 423 before 425.50 and 428.50 then 430. Support lower comes at 411 and 407.50 then 405.50 and 402.50 before 400.50 and 397.50. Uptrend.

SPY Weekly, $SPY

Heading into April options expiration week, equity markets showed resilience holding up despite a building narrative of a possible recession. Elsewhere look for Gold to continue its uptrend while Crude Oil has a short term move higher in consolidation. The US Dollar Index continues to drift to the downside while US Treasuries pullback in their consolidation. The Shanghai Composite and Emerging Markets look to continue in consolidation.

The Volatility Index looks to remain low and stable 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 the QQQ remains in short term consolidation while the SPY is breaking higher. 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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