SPY Trends and Influencers September 21, 2024

• Posted by Greg Harmon
• on September 21st, 2024

Last week, the review of the macro market indicators saw heading into the September FOMC meeting and Options Expiration, equity markets showing strength with a rebound from the week prior. Elsewhere looked for Gold ($GLD) to continue its uptrend while Crude Oil ($USO) consolidated in a short term downtrend. The US Dollar Index ($DXY) continued to drift lower in consolidation while US Treasuries ($TLT) were on the edge of a reversal to an uptrend. The Shanghai Composite ($ASHR) looked to continue the downtrend while Emerging Markets ($EEM) consolidated.

The Volatility Index ($VXX) looked to remain low and stabilizing making the path easier for equity markets to the upside. Their charts looked strong, especially on the longer timeframe with the $SPY on the edge of break to new highs while the $IWM and $QQQ held near recent highs. On the shorter timeframe the SPY was also strong with the IWM and QQQ possibly building tightening consolidation zones.

The week played out with Gold consolidating the move over 2600 before a second wind took it higher at the end of the week while Crude Oil found some strength and rebounded higher. The US Dollar found support and consolidated at the 2024 low while Treasuries fell back from a failed break out higher Monday. The Shanghai Composite managed a small bounce out of the Mid Autumn Festival while Emerging Markets ran up to the August highs.

Volatility ticked up early in the week but fell back after the FOMC meeting to end lower on the week. This pinned equities early in the week but hey rose to new highs Thursday and Friday. This resulted in the SPY printing a new all-time high Thursday and then it and the QQQ and the IWM saw some profit taking Friday. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week approaching the all-time high on the daily chart ahead of the FOMC meeting.  It held there on Monday and made a new intraday high Tuesday but failed to close at a new high.  Wednesday saw the same thing happen with a new intraday high failing to hold up at the close. Thursday saw a gap up at the open and it finally held to close at a new all-time high, breaking the range since the beginning of July. Friday saw profit taking but with price holding over the prior high.  The RSI is making a higher high in the bullish zone with the MACD rising and positive.

The weekly chart shows the first weekly close over the 161.8% extension of the retracement of 2022 drop. The RSI is in the bullish zone but still in a position where a negative divergence remains with the MACD flat and positive. There is resistance higher at 571. Support lower is at 565.50 and 561.50 then 556.50 and 549.50 before 545.75 and 542. Renewed Uptrend.

SPY Weekly, $SPY

Heading into the last full week of September, equity markets showed strength following the FOMC’s first rate cut in 4 years. Elsewhere look for Gold to continue its uptrend while Crude Oil bounces in its downtrend. The US Dollar Index continues to hold lower in consolidation while US Treasuries are failing at levels that could reverse to an uptrend. The Shanghai Composite looks to continue the bounce in  the downtrend while Emerging Markets rise in consolidation.

The Volatility Index looks to remain low and stabilizing making the path easier for equity markets to the upside. Their charts look strong, especially on the longer timeframe with the SPY making a new all-time high Thursday, breaking a range.  The IWM and QQQ are holding up on the edge of a range break to the upside. On the shorter timeframe the SPY is also strong with the IWM and QQQ building momentum as price reaches the August highs. Use this information as you prepare for the coming week and trad’em well.

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