SPY Trends and Influencers December 2, 2023

• Posted by Greg Harmon
• on December 2nd, 2023

Last week, the review of the macro market indicators saw heading into the last week of November, equity markets continued to look strong and ready for more upside. Elsewhere looked for Gold ($GLD) to continue its short term move higher while Crude Oil ($USO) bounced in the downtrend. The US Dollar Index ($DXY) continued the short term drift to the downside while US Treasuries ($TLT) bounced in their downtrend. The Shanghai Composite ($ASHR) looked to stall in its bounce while Emerging Markets ($EEM) consolidated in a broad range.

The Volatility Index ($VXX) looked to remain very low making the path easier for equity markets to the upside. The charts of the large cap and tech indexes looked strong, especially on the longer timeframe. On the shorter timeframe the $QQQ had cleared a major hurdle and the $SPY could be next as it was not far behind. The $IWM continued to remain stuck in consolidation but positive in the short run.

The week played out with Gold driving to a new all-time high close and then consolidating while Crude Oil consolidated under its long term moving average. The US Dollar found support at a 3 month low and bounced while Treasuries continued higher, retesting the 2022 lows. The Shanghai Composite fell back from a lower high while Emerging Markets continued in consolidation under resistance.

Volatility continued to hold sub teens in a tight range, removing pressure on equities. Despite this they could not continue the pace of the move higher and consolidated the recent moves. This resulted in the SPY holding at the July top while the QQQ consolidated at 11 month highs, both trying to trigger bullish patterns. The IWM bucked the trend by maintaining its move higher in consolidation. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week closing the gap from August and stalling after a strong move higher. It held Monday and Tuesday on the daily chart and then tried to move higher Wednesday. That move failed and it closed the initial gap higher. Thursday held again and then Friday it moved higher after the Jerome Powell speech and closed the week at 23 month high. The RSI is into overbought territory but barely and is flat, with the MACD flat and positive.

The weekly chart shows the Cup and Handle triggering. This has a price objective to 570. The RSI on this timeframe is rising in the bullish zone with the MACD crossed up and positive. Both have room to the upside on this timeframe. There is resistance at 460 and 463.50 then 466 and 470 before 472.50 and 474.50 then 479.50. Support lower comes at 457 and 454 then 451 and 447 before 444 and 437.50. Uptrend.

SPY Weekly, $SPY

With the first day of December in the books, equity markets continue to show strength but with some rotation from tech to large and small cap stocks. Elsewhere look for Gold to continue its break out to new highs while Crude Oil consolidates in a downtrend. The US Dollar Index continues the short term drift to the downside while US Treasuries bounce in their downtrend. The Shanghai Composite looks to continue the short term drift lower while Emerging Markets consolidate under long term resistance.

The Volatility Index looks to remain very low making the path easier for equity markets to the upside. Their charts look strong, especially on the longer timeframe. On the shorter timeframe the QQQ is seeing a digestive pause as the SPY and the IWM benefit from money flowing into equities. Use this information as you prepare for the coming week and trad’em well.

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