Macro Week in Review/Preview June 12, 2015

• Posted by Greg Harmon
• on June 12th, 2015

Last week’s review of the macro market indicators suggested, heading into the week that the equity markets would continue to look a bit vulnerable on the daily timeframe but strong on the weekly timeframe. Elsewhere looked for Gold to continue lower while Crude Oil consolidated with a slight downward bias. The US Dollar Index also was in broad consolidation with an upward bias while US Treasuries looked to continue lower. The Shanghai Composite was back off to the races higher with a chance of consolidation while Emerging Markets looked to continue to the downside. Volatility looked to remain subdued keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts suggested that the IWM was strong and taking over leadership while the QQQ looked strongest on the longer timeframe. The SPY might need more sideways consolidation before resuming higher.

The week played out with Gold pushing lower Monday before rebounding to end the week up while Crude Oil continued the consolidation. The US Dollar moved slightly lower while Treasuries found found support mid week and bounced. The Shanghai Composite pushed higher while Emerging Markets began to consolidate at nested support levels. Volatility made a move back lower before reversing at the end of the week. The Equity Index ETF’s halted their falls and reversed to resistance before a Friday pullback. What does this mean for the coming week? Lets look at some charts.

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Gold Daily, $GC_F

Gold Weekly, $GC_F

Gold started the week moving back towards 1200 but ran out of gas mid week and fell back. The daily chart shows all of the SMA’s rolling lower and the RSI turning back at the mid line. The MACD is level. Out on the weekly chart the price continues to sit near support, on the precipice of a big move lower. The RSI on this timeframe remains in the bearish zone and falling with the MACD turning down. There is support at 1140 and then 1100, but really under 1140 can get ugly. Resistance higher comes at 1200 and 1225 followed by 1245. Downside Bias.

West Texas Intermediate Crude Daily, $CL_F

West Texas Intermediate Crude Weekly, $CL_F

Crude Oil continues to build a beak for our alligator. The consolidation in the expanding wedge saw price tap the top and fall back this week. The daily chart shows the RSI continuing to drift lower with a series of lower highs, while the MACD is leveling and attempting a cross to positive. The weekly chart shows the continued consolidation oscillating around 60 since it touched the upper Bollinger Band®. The RSI on this timeframe is stalled at the mid line, still bearish, while the MACD is rising. There is resistance higher at 62 and 66 followed by 69.50. Support lower comes at 58.50 and 57.50 followed by 56 and 55. Consolidation with an Upward Bias.

US Dollar Index Daily, $DX_F

US Dollar Index Weekly, $DX_F

The US Dollar Index fell back from the 50 day SMA immediately Monday and continued lower the rest of the week. The daily chart shows the fall and attempt to bounce. If it does move back higher next week that would make for a higher low, a positive. But for now the RSI is trending lower while the MACD is falling. The weekly chart shows a pull back from a Tweezers Top with the RSI moving back towards the mid line while the MACD is falling, unperturbed. There is support below at 94 and 92 followed by 90. Resistance higher comes at 95.70 and 96.60 followed by 97 and 98.30. Broad Consolidation Continues with a Downward Bias.

iShares Barclays 20+ Yr Treasury Bond Fund Daily, $TLT

iShares Barclays 20+ Yr Treasury Bond Fund Weekly, $TLT

US Treasuries started the week moving lower in a series of 3 steps. But Thursday reversed that with Friday continuing until a late sell off. The daily chart shows a Measured Move to 110 below still. The RSI is in the bearish zone and the MACD is trying to cross up. On the weekly picture it printed a doji, signaling indecision. This can resolve up or down, but after a downward trend many will be looking for it to reverse. The shadow also touched a 61.8% retracement of the last leg higher. The RSI on this timeframe continues to fall and is just breaking into the bearish zone while the MACD is falling. There is support at 117.50 and 114.50 followed by 112.50. Resistance is found above at 118.50 and 120.25 followed by 122.50. Possible Stall in the Downtrend.

Shanghai Stock Exchange Composite Daily, $SSEC

Shanghai Stock Exchange Composite Weekly, $SSEC

The Shanghai Composite took another step high over 5000 and then consolidated. The daily chart ended with a move higher to a new 7 year high close. The RSI on this chart is bullish and instead of moving high into overbought territory this time it is moving sideways. The MACD continues higher but the trajectory is flattening. The weekly chart shows the move higher with the RSI firmly into overbought territory and a MACD that is rising. There is resistance above at 5500 and support lower may be found at 5040 and 4818 before 4750. Continued Upward Bias.

iShares MSCI Emerging Markets Index Daily, $EEM

iShares MSCI Emerging Markets Index Weekly, $EEM

Emerging Markets finally found a bottom Tuesday near the 39.65 level that acted as support and resistance October through January. The daily picture shows the bounce and then pullback, reflected in the RSI, with the RSI still bearish. The MACD started to level. On the weekly chart the price printed a doji with the RSI kinking back higher. The MACD on this timeframe is crossed down and falling though. A lot of mixed up technicals. There is resistance at 40.70 and 41 followed by 42.54. Support lower may come at 40 and 39.65 followed by 39 and 38. Possible Bounce in the Downtrend.

VIX Daily, $VIX

VIX Weekly, $VIX

The Volatility Index started the week at the top of the Bollinger Bands and the 200 day SMA. By Wednesday it had pulled back hard and then bounced a bit to end the week off of the low. The daily chart shows another lower peak in the series since February. The RSI continues around the mid line with the MACD turning lower but also in a narrow range. On the weekly chart the RSI and MACD also give no guidance, running near the mid line and zero. The 20 week SMA is falling hard though. There is support at 12.40 and 10 with resistance above at 15.67 and 18 before 22. Continued Low Volatility.

SPY Daily, $SPY

SPY Weekly, $SPY

The SPY had an up and down week, or maybe more accurately a down and up and down week. It started the week feeding the bears as it fell through the rising trend support level from October. By Tuesday it was at the lower Bollinger Band® and 100 day SMA, printing a doji candle after touching the 150 day SMA. The doji shows indecision and after a downward trend suggests a possible reversal higher. It did just that Wednesday and started toward resistance. Thursday was another doji at resistance that confirmed lower Friday. The price ended right back at that support level and virtually unchanged on the week. The daily chart shows the RSI falling back after moving just above the mid line while the MACD continues to approach a bullish cross. A mixed bag on this timeframe. The weekly chart shows the doji for the full week, just above the 20 week SMA and near the top of the consolidation zone. The RSI continues to hold over the mid line while the MACD has crossed down. Mixed on this timeframe on momentum as well. There is resistance higher at 210.25 and 211 followed by 212.50 and 213.78. Support lower may come at 209 and 208 followed by 206.40 and 204.40. Continued Consolidation in the Long Term Uptrend.

IWM Daily, $IWM

IWM Weekly, $IWM

The IWM also had a down and up and down week but not as pronounced as the SPY. It continued the trend higher that began after the touch of the rising channel to start May. By Thursday it printed a doji at the upper Bollinger Band and fell back Friday. The daily chart shows the RSI above the mid line and bullish while the MACD slowly rises, both positive on this timeframe. The weekly chart shows the continued rise, just above the 20 week SMA. The RSI continues to hold in the bullish zone and is rising while the MACD is heading to cross up. There is resistance higher at 126.25 and 127.13 before a Measured Move to 131. Support lower may come at 125 and 123.50 followed by 122 and 120. Continued Uptrend.

QQQ Daily, $QQQ

QQQ Weekly, $QQQ

The QQQ touched the lower Bollinger Band and 100 day SMA Tuesday before rebounding and finishing with a doji. It resolved higher Wednesday before another doji Thursday that confirmed lower Friday. The daily chart shows the RSI falling back after moving just above the mid line while the MACD continues lower. A negative picture on this timeframe. The weekly chart shows a near doji for the week just above the 20 week SMA and rising trend support. The RSI continues to hold over the mid line but is falling while the MACD has crossed down. There is resistance higher at 109 and 109.40 followed by 110 and 111 before 115. Support lower may come at 108.40 or 107.75 followed by 106.25 and 105. Continued Consolidation in the Long Term Uptrend.

Heading into June Options Expiration week the Equity markets look weak in general short term. Elsewhere look for Gold to continue lower while Crude Oil consolidates in the uptrend. The US Dollar Index is also in broad consolidation but with a downward bias while US Treasuries are trending lower but might be ready for a bounce. The Shanghai Composite remains strong and rising while Emerging Markets are biased to the upside short term in the downtrend. Volatility looks to remain subdued keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts suggest that will take some work for the SPY and QQQ which look weak in the short term and flat intermediate, while the IWM trends higher. Use this information as you prepare for the coming week and trad’em well.

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