SPY Trends and Influencers May 20, 2023

• Posted by Greg Harmon
• on May 20th, 2023

Last week, the review of the macro market indicators saw heading into the May options expiration week, equity markets stalled and chopped around in narrow ranges. Elsewhere looked for Gold ($GLD) to consolidate in the uptrend while Crude Oil ($USO) consolidated in a broad range. The US Dollar Index ($DXY) continued in consolidation with perhaps a drift to the upside while US Treasuries ($TLT) consolidated in the bounce. The Shanghai Composite ($ASHR) looked to continue in consolidation as well while Emerging Markets ($EEM) consolidated too.

The Volatility Index ($VXX) looked to remain very low and stable making the path easier for equity markets to the upside. Their charts were mixed though with the $SPY in consolidation at the February high on both timeframes while the $IWM consolidated just over support. The $QQQ, however, looked strong on both timeframes chugging higher.

The week played out with Gold holding near the highs until a midweek downside break while Crude Oil consolidated in a narrow range. The US Dollar lifted up off support while Treasuries moved lower all week. The Shanghai Composite moved into tight consolidation around 3300 while Emerging Markets also tightened their consolidation range around the 20 day moving average.

Volatility dropped back near the lows from April. This put a tailwind behind equities and they responded with sharp moves higher midweek with the QQQ leading the charge. This resulted in the QQQ making a new 13 month high and the SPY approaching the August 2022 highs. The IWM joined them moving higher but remained within the consolidation range. 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 and under the February high. The range had become tight over the last week. Monday and Tuesday saw that pattern continue and then it started higher Wednesday. It continued on Thursday, breaking to a higher high and printing the highest close since August 25th before seeing some profit taking near the high Friday. The daily chart shows the move higher confirming the uptrend with the RSI in the bullish zone and the MACD crossed up and positive. The Bollinger Bands® are also opening higher.

The weekly chart shows the move up out of consolidation and a stall as it hit the 100 week SMA. The RSI on this timeframe remains above the midline but short of a move over 60 while the MACD is positive and moving higher. There is resistance above at 420 and 423.50 then 425.50 and 428.50 before 430. Support lower comes at 417.50 and 413.50 then 411 and 407.50 before 405.50 and 402.50. Uptrend.

SPY Weekly, $SPY

With the May options expiration in the books, equity markets showed strength with the major indexes moving to higher highs. Elsewhere look for Gold to continue its pullback in consolidation while Crude Oil consolidates in a broad range. The US Dollar Index continues to drift to the upside while US Treasuries pullback in their consolidation. The Shanghai Composite and Emerging Markets look to continue their consolidation as well.

The Volatility Index looks to remain low and stable making the path easier for equity markets to the upside. Their charts look strong, especially on the longer timeframe. On the shorter timeframe both the QQQ and SPY have reconfirmed their uptrends. The IWM, however, remains mired in a consolidation range. Use this information as you prepare for the coming week and trad’em well.

Join the Premium Users and you can view the Full Version with 20 detailed charts and analysis: Macro Week in Review/Preview May 19, 2023

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

blog comments powered by Disqus