SPY Trends and Influencers February 10, 2024

• Posted by Greg Harmon
• on February 10th, 2024

Last week, the review of the macro market indicators saw heading into February, Punxsutawney Phil was calling for the weather to get warmer and equity markets were looking downright hot. Elsewhere looked for Gold ($GLD) to continue the short term consolidation while Crude Oil ($USO) fell back into consolidation. The US Dollar Index ($DXY) continued to drift to the upside in consolidation while US Treasuries ($TLT) drove higher. The Shanghai Composite ($ASHR) looked to continue the downtrend while Emerging Markets ($EEM) consolidated over support.

The Volatility Index ($VXX) looked to remain very low and stable making the path easier for equity markets to the upside. The charts of the $SPY and $QQQ looked strong, especially on the longer timeframe. On the shorter timeframe both the QQQ and SPY had reset on momentum measures and were now also looking better to the upside. The $IWM continued to blaze its own trail, remaining in the 22 month channel.

The week played out with Gold consolidating under resistance while Crude Oil bounced to the upside toward resistance. The US Dollar met resistance and consolidated while Treasuries fell back, erasing last week’s bounce. The Shanghai Composite reversed higher but short of a higher high while Emerging Markets jumped and consolidated under resistance.

Volatility drifted lower in a very narrow range. This gave equities room to the upside and they resumed the uptrend mid-week. This resulted in the SPY and QQQ ending at all-time highs and the IWM continuing heading toward the top of its channel. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week at an all-time high moving up on the daily chart. It held Monday and Tuesday and then ran higher the rest of the week, printing 3 more all-time highs. It broke 500 and ended over it for the first time on Friday to cap off the week. The price is riding the Bollinger Bands® higher as the RSI is starting into overbought territory with the MACD positive and rising.

The weekly chart continued its new streak of being up 5 weeks in a row and 14 of the last 15 weeks. It is also riding the Upper of the Bollinger Bands. The RSI on this timeframe is slightly overbought with the MACD rising and positive. There is resistance at 501.50 and the 138.2% extension of the retracement of the 2022 pullback at 530, and target for the Cup and Handle at 560 above that. Support lower comes at 4998.50 and 495 then 491.50 and 488 before 478. Uptrend.

SPY Weekly, $SPY

Heading into February options expiration, equity markets continued to show strength, especially on the large cap and tech indexes. Elsewhere look for Gold to continue in consolidation while Crude Oil consolidates in a broad range. The US Dollar Index continues to drift to the upside in consolidation while US Treasuries pullback in their downtrend. The Shanghai Stock Exchange will be closed all week for the Lunar New Year holiday while Emerging Markets consolidate under resistance.

The Volatility Index looks to remain very low making the path easier for equity markets to the upside. Their charts also look strong, especially on the longer timeframe where the SPY and QQQ are up 14 of the last 15 weeks and 5 in a row. On the shorter timeframe the QQQ and SPY closed a record highs and look strong. The IWM is trying to break higher on the short term basis and make a run at the top of the 22 month channel. Use this information as you prepare for the coming week and trad’em well.

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