SPY Trends and Influencers April 22, 2023

• Posted by Greg Harmon
• on April 22nd, 2023

Last week, the review of the macro market indicators saw heading into April options expiration week, equity markets showed resilience holding up despite a building narrative of a possible recession. Elsewhere looked for Gold ($GLD) to continue its uptrend while Crude Oil ($USO) had a short term move higher in consolidation. The US Dollar Index ($DXY) continued to drift to the downside while US Treasuries ($TLT) pulled back in their consolidation. The Shanghai Composite ($ASHR) and Emerging Markets ($EEM) looked to continue in consolidation.

The Volatility Index ($VXX) looked to remain low and stable 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 the QQQ remained in short term consolidation while the SPY was breaking higher. The $IWM remained weaker holding in consolidation after a failed short term move higher.

The week played out with Gold pulling back from the retest at the all-time high to the 2000 level while Crude Oil rejected at the top of the consolidation zone lower. The US Dollar consolidated sideways while Treasuries tested the bottom of the range since March. The Shanghai Composite moved sharply higher early and then gave it all back and more as it fell to the 3300 level while Emerging Markets continued in consolidation, dropping slightly to end the week.

Volatility dropped to its lowest close in 5 months and held there to end lower. This should have removed pressure on equities but instead of rising they moved lower in a choppy environment. This resulted in the SPY and QQQ ending the week slightly lower with the IWM slightly higher. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week drifting higher but still shy of the February high. It continued to drift up through Tuesday morning before pulling back to end the week lower. The daily chart shows price remains above the rising 20 day SMA. The RSI is in the bullish zone with the MACD looking to cross down. These would indicate a pullback could continue within the bullish vibe.

The weekly chart shows another doji star just under the 100 week SMA. The RSI on this timeframe is flat and remains short of a move into the bullish zone while the MACD is positive and rising. There is resistance at 413.50 and 417.50 then 420 and 423 before 425.50. Support lower comes at 411 and 407.50 then 405.50 and 402.50 before 400.50. Stall in Uptrend.

SPY Weekly, $SPY

With the April options expiration in the books and heading into the heart of earnings season, equity markets showed a lack of energy churning in narrow ranges. Elsewhere look for Gold to pause in its uptrend while Crude Oil pulls back in its consolidation in a broad range. The US Dollar Index continues to drift to the downside while US Treasuries pullback in broad consolidation. The Shanghai Composite looks to pullback while Emerging Markets consolidate in their downtrend.

The Volatility Index looks to remain low and stable creating a positive environment for equity markets to move the upside. Their charts have all transformed to some form of consolidation in the short term. On the longer timeframe both the QQQ and IWM are also in consolidation while the SPY still holds a small bias to the upside over stability. Use this information as you prepare for the coming week and trad’em well.

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