SPY Trends and Influencers January 25, 2025

• Posted by Greg Harmon
• on January 25th, 2025

Last week, the review of the macro market indicators saw with the January options expiry in the books, equity markets showed strength after a precarious start Monday morning. Elsewhere looked for Gold ($GLD) to continue its assault on the all-time high while Crude Oil ($USO) rose in consolidation. The US Dollar Index ($DXY) continued to drift higher while US Treasuries ($TLT) remained in a short term downtrend. The Shanghai Composite ($ASHR) looked to continue to chop the entirety of a broad range while Emerging Markets ($EEM) remained in a short term downtrend.

The Volatility Index ($VXX) looked to remain low making the path easier for equity markets to the upside. The charts of the $SPY and $QQQ looked strong on the longer timeframe. On the shorter timeframe both the QQQ and SPY were inching towards recovering the 6 week pullbacks. The $IWM looked better than both on the shorter timeframe but had work to do on the longer chart.

The week played out with Gold continuing higher to nearly reach the October all-time high while Crude Oil met resistance and fell back in consolidation. The US Dollar cracked support and moved to a 1 month low while Treasuries fell back in their downtrend. The Shanghai Composite held in a tight range over short term support while Emerging Markets bounced up to test short term resistance.

Volatility ticked down all week giving equities a tailwind to move higher. This resulted in the SPY printing a new all-time high Thursday with the QQQ not far behind, just short otf its prior top. The IWM moved over short term resistance to a 1 month high. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week stalled at a lower high in a bounce from a lower low in a digestive pullback. Monday saw it rise to the prior bounce high and then Tuesday continued higher. Wednesday it stopped just high of the all-time high before printing a new high Thursday. Friday poked slightly higher before seeing profit taking late in the day. The RSI is rising in the bullish zone with the MACD positive and climbing as the Bollinger Bands® open higher.

The weekly chart shows continuation higher but stopping shy of a weekly closing high. The RSI is rising with the MACD level after resetting lower. There is resistance at 609 and 610.25 with the 200% extension of the retracement of the 2022 pullback near 613 above that. Support lower is at 604 and 600 then 593 and 590 before 585 and 580. Uptrend.

SPY Weekly, $SPY

Heading into the January FOMC meeting, equity markets showed strength with a 4 day trend higher before some profit taking Friday. Elsewhere look for Gold to continue its push to a new high while Crude Oil pulls back in consolidation. The US Dollar Index looks to have stalled in its move to the upside while US Treasuries resume their downtrend. The Shanghai Composite looks to continue chop in consolidation while Emerging Markets continue the short term downtrend.

The Volatility Index looks to remain low and stable making the path easier for equity markets to the upside. Their charts look strong, especially on the longer timeframe. On the shorter timeframe the SPY, the QQQ and the IWM are all reversing out of the pullbacks started in December with the SPY the first to print a new all-time high. The QQQ is less than 2% away from its prior top with the IWM still over 5% below its all-time high. Use this information as you prepare for the coming week and trad’em well.

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