SPY Trends and Influencers December 29, 2012
- Posted by Greg Harmon
- on December 29th, 2012
Last week’s review of the macro market indicators suggested, heading into the last week of the year there was a positive tone in the price action of equities. That said Gold ($GLD) looked to continue lower while Crude Oil ($USO) rose. The US Dollar Index ($UUP) seemed content to move sideways with a downside bias while US Treasuries ($TLT) were biased lower. The Shanghai Composite ($SSEC) and Emerging Markets ($EEM) were biased to the upside with risk of the Chinese market reversing. Volatility ($VIX) looked to remain subdued keeping the bias higher for the equity index ETF’s $SPY, $IWM and $QQQ, despite the moves lower to end last week.
The week played out with Gold finding some footing at the 1640 level while Crude Oil did continue higher. The US Dollar moved sideways printing a series of doji candles while Treasuries moved higher to the confluence of the Simple Moving Averages (SMA). The Shanghai Composite consolidated in a tight range before gapping higher again and Emerging Markets held at their higher levels. Volatility continued higher but remained subdued. The Equity Index ETF’s fell back all week moving here and there with the news. What does this mean for the coming week? Lets look at some charts.
As always you can see details of individual charts and more on my StockTwits feed and on chartly.)
SPY Daily, $SPY
SPY Weekly, $SPY
The SPY tripped over the Fiscal Curb, nearing the cliff. Moving below the 20, 50 and 100 day Simple Moving Averages (SMA) this week it is trending lower in the short term. The Relative Strength Index (RSI) on the daily basis is in bullish territory but falling and near a turn into bearish territory with a negative Moving Average Convergence Divergence indicator (MACD) that is growing. Things looks lower on this timeframe. The weekly view is testing out a lower high for the first time since September, failing at the rising trend line resistance extending back to the March 2009 low. The RSI is still bullish on this timeframe also but turning back lower after making a lower high. The MACD on the weekly chart is showing that it averted a cross to positive and is growing more negative now. These point lower as well. There is support below at 139.80 and 138 followed by 133.75. Under that makes a lower low and reverses the uptrend to a downtrend. Resistance is found higher at 142 and 144.44 with 147 above that and a strengthening of the bull run. Continued Short Term Downward Movement in the Uptrend.
As the last day of 2012 approaches Gold continues to look lower while Crude Oil shows an upside trend continuing. The US Dollar Index and US Treasuries seem content to move sideways with US Treasuries now biased higher and the Dollar Index lower. The Shanghai Composite and Emerging Markets are both biased to the upside with risk of Emerging Markets consolidating further first. Volatility has jumped and is looking to relatively higher than recently switching the bias for the equity index ETF’s SPY, IWM and QQQ, lower, with the QQQ looking the worst and IWM the strongest. Use this information as you prepare for the coming week and trade’m well.
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Gregory W. Harmon CMT, CFA, has traded since 1986 and held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)