SPY Trends and Influencers January 18, 2025

• Posted by Greg Harmon
• on January 18th, 2025

Last week, the review of the macro market indicators saw heading into the January options expiry and the start of earnings season, equity markets showed some short term weakness. Elsewhere looked for Gold ($GLD) to continue its rise in consolidation while Crude Oil ($USO) consolidated in the upper half of a broad range. The US Dollar Index ($DXY) continued to drift to the upside while US Treasuries ($TLT) resumed their downtrend. The Shanghai Composite ($ASHR) looked to continue the short term move lower while Emerging Markets ($EEM) consolidated continue their downward reversal.

The Volatility Index ($VXX) looked to remain on the edge of low to slightly elevated making the path easier for equity markets to the downside. Their charts were starting to show some cracks on the weekly chart, but with the $QQQ remaining strong, on the longer timeframe. On the shorter timeframe the $SPY, the QQQ and the $IWM all were making lower lows and looking weaking.

The week played out with Gold reaching the top of the consolidation zone while Crude Oil also touch the top or a consolidation range and met resistance. The US Dollar made a new 14 month high Monday before digesting the gain while Treasuries found support and reversed higher midweek. The Shanghai Composite also bounced but met resistance at prior support while Emerging Markets saw a failed breakdown Monday quickly reverse higher.

Volatility ticked up at the open Monday and then fell back all week. This gave equities some life and they rose through the end of the week. This resulted in the SPY and IWM both rising to a new January high with the QQQ not far behind them. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week sitting at a 2 month low and into the post-election gap. It gapped down Monday at the open and the moved higher all day, closing that gap and printing a bullish Marubozu candle on the daily chart, looking for more upside. And that is what we saw the rest of the week as it ended the week at a high for January. The RSI is rising in the bullish zone with the MACD crossed up but negative.

The weekly chart printed a near bullish Engulfing Marubozu on the week. This smells of a renewed move higher. The RSI is rising in the bullish zone with the MACD leveling and positive after a pullback. There is resistance higher at 600 and 604 then 609. Support lower is at 593 and 590 the 585 and 580 before 574.50 and 571.50. Uptrend.

SPY Weekly, $SPY

With the January options expiry in the books, equity markets showed strength after a precarious start Monday morning. Elsewhere look for Gold to continue its assault on the all-time high while Crude Oil rises in consolidation. The US Dollar Index continues to drift higher while US Treasuries remain in a short term downtrend. The Shanghai Composite looks to continue to chop the entirety of a broad range while Emerging Markets remain in a short term downtrend.

The Volatility Index looks to remain low making the path easier for equity markets to the upside. The charts of the SPY and QQQ look strong on the longer timeframe. On the shorter timeframe both the QQQ and SPY are inching towards recovering the 6 week pullbacks. The IWM looks better than both on the shorter timeframe but has work to do on the longer chart. Use this information as you prepare for the coming week and trad’em well.

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