SPY Trends and Influencers: Monthly Edition February into March 2012

Last month in this space my Monthly Macro Review/Preview suggested the monthly outlook could change to an uptrend for Gold ($GLD) and Copper ($JJC) would confirm. The divergence of Crude Oil ($USO) consolidating in a bullish bias with Natural Gas ($UNG) continuing lower would continue. US Treasuries ($TLT) and the US Dollar Index ($UUP) both suggested continued strength. The Shanghai Composite ($SSEC) remained trending lower while Emerging Markets ($EEM) were moving to a Neutral to slightly bullish bias and the German DAX ($DAX) reversed higher. Volatility ($VIX) looked to continue to move lower as it approached support. Despite the upward bias to Treasuries and the US Dollar the Equity Index ETF’s $SPY, $IWM and $QQQ were all now aligned and set up to continue higher in the coming months. How does the additional month impact the longer term picture? Let’s look at some charts.

As always you can see details of individual charts and more on my StockTwits feed and on chartly.)

SPY, $SPY

The SPY continued higher putting a little space between the candle and the Fan Line as it made new highs unseen since December 2007. It continues to look strong with a Relative Strength Index (RSI) that is bullish and rising and a Moving Average Convergence Divergence (MACD) indicator that is back positive after a very shallow stint in negative territory. The next target is 143.65 from October 2007 and then there is clear air above. That high is also the target for the Measured Move higher. The May high will serve as support now with support lower at 118. Continued Uptrend.

For complete analysis of the 13 markets summarized here join the premium service and read Macro Month in Review/Preview February into March 2012 or send me an e-mail requesting a special Macro package.

Heading into March the broad picture for the market looks even more bullish. In the Metals Gold looks as it may consolidate in an uptrend while Copper is moving higher. In Fuel Crude Oil looks to continue higher and Natural Gas may be starting to bottom. The US Dollar Index looks to be in a consolidation range while Treasuries also consolidate but with an upward bias. In the Foreign Markets the Shanghai Composite is showing early signs of a turn higher while Emerging Markets move higher in a broad range and the German DAX just rises. Volatility may be slowing its fall but shows no signs of rising soon. A low Volatility environment with Metals and Oil biased higher, the Dollar and Bonds consolidating and Foreign Markets giving a positive influence sets up a near perfect scenario for the Equity Index ETF’s SPY, IWM and QQQ to continue higher. When looking at the charts of those ETF’s they concur and are offering large upside targets. A breakout of Treasuries higher and near the flag target, collapse in Copper, Oil or Foreign Markets could change that bias but that is not in the charts. Use this information to understand the long term trends in Equities and their influencers as you prepare for the coming months.

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