SPY Trends and Influencers June 22, 2024

Last week, the review of the macro market indicators saw 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 looked for Gold ($GLD) to continue consolidation while Crude Oil ($USO) consolidated in a broad range. The US Dollar Index ($DXY) looked ready to test the top of the consolidation range while US Treasuries ($TLT) basked in a short term uptrend in the secular downtrend. The Shanghai Composite ($ASHR) looked to continue the short term move lower while Emerging Markets ($EEM) consolidated in the long 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 negated prior possible momentum divergences. The $IWM continued to languish and showed possible renewed weakness moving lower on the week.

The week played out with Gold continuing to hold over support while Crude Oil moved up toward the top of the broad range. The US Dollar continued higher toward the April high consolidation zone while Treasuries continued higher toward a short term higher high. The Shanghai Composite continued lower cracking support at 3000 while Emerging Markets tried to break the short term consolidation to the upside in the long channel but failed to hold up.

Volatility continued to hold at very low levels but with a slight upward drift at the end of the week. This put pressure on equities after starting the week with new all-time highs and they ended the week with a 2 day move lower. This resulted in the SPY and QQQ working out of short term overbought signals. The IWM continued to do its own thing holding in the middle of the 2024 range. What does this mean for the coming week? Let’s look at some

SPY Daily, $SPY

The SPY came into the week after printing 5 consecutive new all-time highs the previous week. It was also holding a gap up on the daily chart. It made 2 more all-time highs to start the week before heading into the Wednesday holiday. Thursday saw a bearish engulfing candle though and it continued lower Friday, but with a doji, indecision. The 2 day pullback took the RSI out of overbought territory and turned the MACD lower in positive territory. The Bollinger Bands® are still pointing higher but have widened out suggesting a consolidation or pullback.

The weekly chart shows a positive candle but with a long upper shadow, possibly building an Evening Star reversal. But the Bollinger Bands are pointing higher on this timeframe with the RSI poking into overbought territory while the MACD is crossing up and positive. There is resistance higher at 549.50 and then the target of the Cup and Handle at 560 and the 161.8% extension of the retracement of the 2022 pullback at 562.20 above that. Support lower is at 543 and 540 then 537 and 533 before 530 and 524.50. Uptrend.

SPY Weekly, $SPY

With the June quadruple witching in the books in the books, equity markets looked a bit gassed after a good start. Elsewhere look for Gold to continue its consolidation in the uptrend while Crude Oil moves higher in consolidation. The US Dollar Index continues the short term move to the upside while US Treasuries continue their short term move higher in the secular downtrend. The Shanghai Composite looks to continue the short term trend lower while Emerging Markets look to be on the verge of breaking consolidation to the upside.

The Volatility Index looks to remain very low making the path easier for equity markets to the upside. The charts of the SPY and QQQ look strong, especially on the longer timeframe, but with possible reversal or digestion candles this week. On the shorter timeframe both the QQQ and SPY could us a reset on momentum measures as both are extended and pullbacks are helping there. The IWM continued to go nowhere moving mainly sideways in the upper part of the 2½ year consolidation. Use this information as you prepare for the coming week and trad’em well.

Join the Premium Users and you can view the Full Version with 20 detailed charts and analysis: Macro Week in Review/Preview June 21, 2024

Start of Summer Annual Sale! Hi all the Start of Summer Annual Sale is entering its last week at Dragonfly Capital. Get an annual subscription for 38.2% off or pay quarterly for 15% off. Both auto-renew at that discounted rate until you decide to leave.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

blog comments powered by Disqus
Dragonfly Caps Blog