SPY Trends and Influencers June 15, 2024

• Posted by Greg Harmon
• on June 15th, 2024

Last week, the review of the macro market indicators saw with the first week of June in the books, equity markets were mixed with the large caps and tech heavy Nasdaq showing renewed strength while small caps continued to flounder. Elsewhere looked for Gold ($GLD) to continue to consolidate the long move higher while Crude Oil ($USO) moved lower in a consolidation range. The US Dollar Index ($DXY) continued in broad consolidation while US Treasuries ($TLT) continued their long term downtrend. The Shanghai Composite ($ASHR) looked to continue the short term move lower while Emerging Markets ($EEM) continued the short term move lower in a consolidation channel.

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 continued to step higher and looked strong as well with an eye on potential momentum divergences. The $IWM continued to be dead money, as it had been for the past 2½ years.

The week played out with Gold consolidating over support at 2300/oz while Crude Oil jumped Monday and then held under resistance the rest of the week. The US Dollar moved higher in the broad consolidation range while Treasuries have reversed the 2024 downtrend, but still far from a long term higher high. The Shanghai Composite found support and held in a tight range while Emerging Markets remained in their recent narrow range.

Volatility continued to hold under the teens, nearly unchanged. This put a tail wind to the backs of the large cap and tech focused equity indexes and the SPY and QQQ responded with 5 consecutive new all-time highs on the week. The IWM continued to act like the aloof child doing its own thing all week with a strong Wednesday followed by a fast sell off to end the week lower. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week holding near the all-time high from Wednesday the prior week. It started higher Monday and continued Tuesday, then gapped up Wednesday out of the Bollinger Bands®. It added again Thursday and moved back toward the BB’s and held the gap Friday adding  a 5^th new all-time high. The daily chart shows the RSI climbing into overbought territory, ending the momentum divergence with a higher high. The MACD is rising and positive.

The weekly chart shows a strong candle higher closing near the high of the week. The RSI is rising into overbought as well and on the verge of negating the possible momentum divergence on this timeframe. The MACD is crossing up and positive. There is no resistance higher and a target on the Cup and Handle at 560. Support lower is now at 535 and 530 then 524.50 and 520.50 before 517.50 and 513.50. Uptrend.

SPY Weekly, $SPY

With the June FOMC meeting and inflation data in the books, equity markets showed both strength and weakness with large caps and tech names continuing to make new all-time highs while small caps took a beating. Elsewhere look for Gold to continue consolidation while Crude Oil consolidates in a broad range. The US Dollar Index looks ready to test the top of the consolidation range while US Treasuries bask in a short term uptrend in the secular downtrend. The Shanghai Composite looks to continue the short term move lower while Emerging Markets consolidate in the long channel.

The Volatility Index looks to remain very low and stable making the path easier for equity markets to the upside. The charts of the SPY and QQQ look strong, especially on the longer timeframe. On the shorter timeframe both the QQQ and SPY have negated prior possible momentum divergences. The IWM continues to languish and showed possible renewed weakness moving lower on the week. Use this information as you prepare for the coming week and trad’em well.

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