SPY Trends and Influencers April 29, 2023

• Posted by Greg Harmon
• on April 29th, 2023

Last week, the review of the macro market indicators saw 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 looked for Gold ($GLD) to pause in its uptrend while Crude Oil ($USO) pulled back in its consolidation in a broad range. The US Dollar Index ($DXY) continued to drift to the downside while US Treasuries ($TLT) pulled back in broad consolidation.

The Shanghai Composite ($ASHR) looked to pullback while Emerging Markets ($EEM) consolidated in their downtrend. The Volatility Index ($VXX) looked to remain low and stable creating a positive environment for equity markets to move the upside. Their charts had all transformed to some form of consolidation in the short term. On the longer timeframe both the $QQQ and $IWM were also in consolidation while the $SPY still held a small bias to the upside over stability.

The week played out with Gold consolidating just under 2000 while Crude Oil continued to the downside. The US Dollar found support in its pullback and held at the lows of the year while Treasuries held in the more recent tight consolidation range. The Shanghai Composite found support and prior lows and reversed higher and up through resistance while Emerging Markets moved back toward longer term support.

Volatility rose early in the week but then dropped back to an 18 month low. This put initial pressure on equities and they responded with a 2 day move lower Tuesday and Wednesday. All reversed Thursday and continued higher to finish the week. This resulted in the SPY up slightly and near the recent highs, the QQQ breaking to a new 8 month high with the IWM lower on 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 in consolidation near a retest of the February high. It continued Monday and then fell back Tuesday and Wednesday. It gapped up Thursday and ran higher and continued Friday to end up on the week and at a 3 month high. The Bollinger Bands® on the daily chart are opening higher to allow a move. The RSI on this timeframe is rising in the bullish zone with the MACD turning towards a cross up and is positive. A close over 417.50 would reconfirm the short term uptrend.

The weekly chart shows continuation higher and another weekly higher high. The Bollinger Bands are expanding on this timeframe as well. The RSI is still shy of a move over 60 into the bullish zone with the MACD positive and climbing. There is resistance at 417.50 and 420 then 423 and 425.50 before 428.50 and 430. Over 430 would confirm an intermediate term uptrend. Support lower comes at 413.50 and 411 then 407.50 and 405.50 before 402.50 and 400.50. Short Term Uptrend.

SPY Weekly, $SPY

With the month of April in the books, equity markets showed resilience with a rebound from an ugly start to the week to finish stronger. Elsewhere look for Gold to consolidate in its uptrend while Crude Oil consolidates in a broad range. The US Dollar Index continues to drift to the downside while US Treasuries consolidate in their downtrend. The Shanghai Composite looks to continue in consolidation along with Emerging Markets.

The Volatility Index looks to remain very low and stable making the path easier for equity markets to the upside. Their charts are mixed with the SPY following the QQQ higher but with both looking strong on both timeframes. The IWM however remains stuck in consolidation under resistance. Use this information as you prepare for the coming week and trad’em well.

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