SPY Trends and Influencers May 4, 2024

• Posted by Greg Harmon
• on May 4th, 2024

Last week, the review of the macro market indicators saw 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 looked for Gold ($GLD) to continue its uptrend while Crude Oil ($USO) paused in its move higher. The US Dollar Index ($DXY) continued to drift to the top of consolidation while US Treasuries ($TLT) resumed their downtrend. The Shanghai Composite ($ASHR) shifted into short term consolidation while Emerging Markets ($EEM) consolidated near the top of a broad range.

The Volatility Index ($VXX) looked to remain low making the path easier for equity markets to the upside. The $SPY and $QQQ charts looked strong, especially on the longer timeframe. On the shorter timeframe both the $QQQ and $SPY as well as the $IWM were working on reversing their pullbacks.

The week played out with Gold dropping back to support and a big round number while Crude Oil fell back to retest the March breakout area. The US Dollar pulled back to support and bounced while Treasuries consolidated in their downtrend. The Shanghai Composite had a short 2 day week moving over resistance to a 6 month high and held while Emerging Markets jumped to resistance at a 15 month high.

Volatility dropped to 1 month lows removing pressure on equities late in the week and they rebounded from a 2 day move lower. The SPY and QQQ finished the week little changed with the IWM slightly higher. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week attempting to push up out of a consolidation on the daily chart. That consolidation happened after a pullback from the top at the end of March. It continued Monday and met resistance at the 20 day SMA. That pushed it lower following the 20 day SMA through Thursday. Friday it gapped over it and ran to the 50 day SMA. The RSI is pushing back towards the bullish zone with the MACD crossed up but still negative. There is still some work left to do before confirmation that the pullback is over.

The weekly chart shows price continues to hold over the 20 week SMA with a second positive week. The RSI is rising in the bullish zone with the MACD leveling after resetting lower. There is resistance at 513.50 and 517.50 then 520.50 and 524.50 with the 138.2% extension of the retracement of 2022 at 530 above. Support lower sits at 510 and 503.50 then 501.50 and 498.50 before 495 and 491. Consolidation in Uptrend.

SPY Weekly, $SPY

With April and the May FOMC meeting in the books, equity markets showed some strength moving higher in a busy week for news. Elsewhere look for Gold to pullback in its uptrend while Crude Oil pulls back in the long uptrend as well. The US Dollar Index is on the edge of a break out to the upside while US Treasuries pause in their downtrend. The Shanghai Composite looks to continue the short term move higher as it returns from a Labor Day holiday while Emerging Markets with further upside will confirm a new uptrend.

The Volatility Index looks to remain very low making the path easier for equity markets to the upside. Their charts look strong on the longer timeframe. On the shorter timeframe the IWM is leading the way to a reversal higher while both the QQQ and SPY still have some work to do before they are in the clear. Use this information as you prepare for the coming week and trad’em well.

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