SPY Trends and Influencers October 12, 2024

Last week, the review of the macro market indicators saw with the 3rd Quarter in the books and the September Non-Farm Payroll report posted, equities had a seesaw week. Elsewhere looked for Gold ($GLD) to continue its uptrend while Crude Oil ($USO) possibly created a new uptrend. The US Dollar Index $(DXY) continued to move to the upside in consolidation while US Treasuries ($TLT) fell back into consolidation. The Shanghai Composite ($ASHR) looked to continue higher while Emerging Markets ($EEM) continued their young uptrend.

The Volatility Index ($VXX) looked to remain below normal 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 looked ready to break flags to the upside. The $IWM continued to hold near the top of consolidation.

The week played out with Gold digesting the run higher and gaining strength again at the end of the week while Crude Oil met resistance in the move higher and stalled. The US Dollar continued higher to a 2 month high while Treasuries continued to pull back from the failed September break out. The Shanghai Composite opened higher and exploded to 33 month high following the weeklong holiday before giving up nearly all of that gain to end the week where it opened while Emerging Markets started the week at a 19 month high before moving lower.

Volatility ticked up near the September peak early in the week but drifted lower to end slightly higher. The equity index ETF’s had mixed reactions to this with the SPY making new all-time highs both Wednesday and Friday and the QQQ rising back to the September peak. The IWM managed to stop dropping and morphed into consolidation under the recent resistance. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week within 40 cents of the all-time high set at the beginning of the week. It held over the July high Monday on a pullback to the 20 day SMA and then started higher. Wednesday it printed a new all-time high and held Thursday before another move higher Friday to end the week at an all-time high. The Bollinger Bands® had squeezed on the daily chart and are now opening higher to allow a move. The RSI is rising in the bullish zone with the MACD positive and crossing up.

There is a target higher on a Measured Move to 595. The weekly chart shows the fifth positive week in a row as price rides the Upper Bollinger Band higher. The RSI is rising in the bullish zone and about to make a higher high with the MACD crossing up and positive. There is no resistance higher. Support lower is at 574.50 and 571.50 then 565.50 and 561.50 before 556.50 and 549.50. Uptrend.

SPY Weekly, $SPY

With the inflation reports behind us, equity markets showed strength, the SPY ending at an all-time high. Elsewhere look for Gold to continue its uptrend while Crude Oil consolidates in a broad range. The US Dollar Index continues to move to the upside while US Treasuries consolidate in their downtrend. The Shanghai Composite looks to reverse lower while Emerging Markets consolidate the start of an uptrend.

The Volatility Index looks to remain low making the path easier for equity markets to the upside. Their charts look strong, especially the SPY and QQQ on the longer timeframe. On the shorter timeframe both the QQQ and SPY are also now ready to resume the move higher. The IWM looks a bit less powerful but is holding near resistance, a good show of relative strength for this sector. Use this information as you prepare for the coming week and trad’em well.

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