SPY Trends and Influencers April 27, 2024

• Posted by Greg Harmon
• on April 27th, 2024

Last week, the review of the macro market indicators saw with the April options expiry in the books, equity markets finished the week black and blue after taking a beating. Elsewhere looked for Gold ($GLD) to continue its consolidation at all-time highs in the uptrend while Crude Oil ($USO) pulled back in its uptrend. The US Dollar Index ($DXY) continued to drift to the upside while US Treasuries ($TLT) pulled back in their downtrend. The Shanghai Composite ($ASHR) looked to continue the consolidation in its short term uptrend while Emerging Markets ($EEM) dropped in broad consolidation.

The Volatility Index ($VXX) looked to remain low but rising keeping the pressure on equity markets. Their charts looked weak, especially on the shorter timeframe. On the longer timeframe both the $QQQ and $SPY remained above break out levels from the start of the year, not a problem yet. The $IWM had fallen back into its long channel consolidation though, a failed break out. Those often lead to fast moves lower.

The week played out with Gold dropping back and finding quickly support while Crude Oil found support and started back higher late in the week. The US Dollar built a bull flag while Treasuries continued their move lower. The Shanghai Composite continued to consolidate under resistance while Emerging Markets found support and rose toward the top of the consolidation range.

Volatility fell back to the mid teens. This relieved the pressure on equities and they responded by starting the week with a 2 day move higher. All found stalled Wednesday and pulled back, but the drove higher again Thursday and Friday. This resulted in the SPY, IWM and QQQ ending off last week’s lows, but a little more work to put in to convince the pullback is over. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week with its first 5% pullback of the year. It bounced Monday and printed an inside real body candle. It followed with a move higher Tuesday before getting stalled Wednesday and opening with a gap down Thursday. It rose all day though and followed higher on Friday to touch the 20 day SMA before closing just below it. The RSI on the daily chart is rising at the midline with the MACD curled up and moving towards a cross.

The weekly chart had an inside print, a possible reversal signal, holding over the 20 week SMA. The RSI is moving higher in the bullish zone with the MACD crossed down and falling but with the slope leveling. There is support at 503.50 and 501.50 then 498.50 and 495 before 491 and 488. Resistance is at 510 and 513.50 then 517.50 and 520.50 before 524.50. Pause in Uptrend.

SPY Weekly, $SPY

With just 2 trading days left in April, equity markets showed some resilience with a rebound from their first 5% or more pullbacks this year. Elsewhere look for Gold to continue its uptrend while Crude Oil pauses in its move higher. The US Dollar Index continues to drift to the top of consolidation while US Treasuries resume their downtrend. The Shanghai Composite shifts into short term consolidation while Emerging Markets consolidate near the top of a broad range.

The Volatility Index looks to remain low making the path easier for equity markets to the upside. The SPY and QQQ charts look strong, especially on the longer timeframe. On the shorter timeframe both the QQQ and SPY as well as the IWM are working on reversing their pullbacks. Use this information as you prepare for the coming week and trad’em well.

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