SPY Trends and Influencers: Monthly Edition August into September 2013

• Posted by Greg Harmon
• on September 1st, 2013

Last month in this space my Monthly Macro Review/Preview had the monthly outlook suggesting that Gold ($GLD) and Copper ($JJC) would continue to consolidate with a bias lower while Crude Oil ($USO) continued to advance, as it watched Natural Gas ($UNG) look for a bottom in its move lower. The US Dollar ($UUP) continued to consolidate in a tightening range while US Treasuries ($TLT) looked to continue lower. The Shanghai Composite ($SSEC) and Emerging Markets ($EEM) looked to continue to move lower as well, while the German DAX ($DAX) looked for strength to break consolidation higher. Volatility ($VIX) looked to remain low keeping the bias for equities higher. The Equity Index ETF’s $SPY, $IWM and $QQQ were all looking better to the upside, with the SPY and IWM slightly overbought. How does an 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 printed a bearish Dark Cloud Cover candlestick for August, if confirmed in September. The close brought the price back to the mid line between the Upper Median and Median Lines of the bullish Andrew’s Pitchfork. Certainly some consolidation would be welcome to long term bulls. The RSI is holding strong in the high 60’s with a MACD that is rising. These support a continued bull case higher. There is support lower at 157.52 and 153.20 followed by 144 (A Fibonacci number). There is no resistance over 170.97 but a Measured Move to 190. Consolidation in the Uptrend.

The monthly outlook suggests the upside for Gold will continue while Copper consolidates. The uptrend in Crude Oil looks to continue while Natural Gas tries to reverse higher off of support. The US Dollar Index is still consolidating while US Treasuries may try to reverse the downtrend. The Shanghai Composite looks to continue to move lower as Emerging Markets continue to bore moving sideways and the German DAX looks higher, but may continue to consolidate first. Volatility is expanding but remains at low levels supporting upside in the equity markets. The Equity Index ETF’s SPY, IWM and QQQ are all set up to continue higher in the coming months from their price action. As noted on the individual charts there is room for some short term downside without breaking the upward bias, with the SPY looking the weakest. Use this information to understand the long term trends in Equities and their influencers as you prepare for the coming months.

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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.

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