Macro Week in Review/Preview October 9, 2015

• Posted by Greg Harmon
• on October 9th, 2015

Last week’s review of the macro market indicators suggested heading into the first full week of October that the Indexes had again dodged a bullet and ended the week on strength. Elsewhere looked for Gold to continue to consolidate in its downtrend while Crude Oil consolidated in its downtrend. The US Dollar Index looked to mark time as it consolidated its move higher while US Treasuries were biased higher in the short term. The Shanghai Composite looked to continue to consolidate in its trend lower while Emerging Markets were biased to the upside in broad consolidation after their move lower. Volatility looked to remain elevated but moving back toward normal levels easing the headwind for the equity index ETF’s SPY, IWM and QQQ. The indexes themselves all looked good in the short term while they consolidated in the intermediate term.

The week played out with Gold probing the upper end of the consolidation and end the week peeking over the top while Crude Oil broke its consolidation to the upside. The US Dollar drifted lower while Treasuries reversed course and started lower. The Shanghai Composite gapped higher after a week off and held while Emerging Markets continued their move higher. Volatility continued lower, edging back to normal ranges. The Equity Index ETF’s all continued higher off of the last Friday charge, with the SPY and the IWM leading the charge and the QQQ better, but lagging them. What does this mean for the coming week? Lets look at some charts.

If you like what you see sign up for more ideas and deeper analysis using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits feed and on chartly.)

Gold Daily, $GC_F

Gold Weekly, $GC_F

Gold moved higher on the week, but kept getting knocked back when it touched falling trend resistance. Friday it broke through to the upside and closed at the 150 day SMA. This is also horizontal resistance that has built up over the last 2 months. The daily chart shows the symmetrical triangle break which triggers a target of 1230, near the resistance at 1225. The RSI on this timeframe is bullish and rising with the MACD rising. On the weekly chart the move does not look so impressive. At resistance and still in a downtrend, the RSI is trying to push through the mid line while the MACD turns higher. promising but not there yet. There is resistance at 1160 and 1180 followed by 1200 and 1225. Support lower comes at 1140 and 1100 followed by 1080. Short Term Upward Bias.

West Texas Intermediate Crude Daily, $CL_F

West Texas Intermediate Crude Weekly, $CL_F

Crude Oil broke its symmetrical triangle to the upside Monday and kept going. Friday saw a spike to the 200 day SMA and pullback in a Shooting Star, so there may be a pause or reversal to start next week. The daily chart shows the RSI moving sideways in the bullish zone while the MACD is rising. On the weekly picture the move shows as a second spike over 50 with a rising RSI and MACD. These suggest and [pullback may be short lived. There is resistance at 50.50 and 52.50 followed by 53.50 and 55. Support lower comes at 48 and 46.60 followed by 45 and 44.20. Short Term Uptrend with Chance of Reversal.

US Dollar Index Daily, $DX_F

US Dollar Index Weekly, $DX_F

What started the week as consolidation in the US Dollar Index ended up with a rollover lower. The daily chart shows the RSI also turning down through the mid line with the MACD crossed down and falling. On the weekly chart the broad consolidation continues. The Bollinger Bands® are still tightening and the MACD is still falling as the RSI holds near the mid line. There is resistance higher at 95.25 and 97 followed by 98.40 and 99. Support lower stands at 94 and 92. Broad Consolidation Continues with a Short Term Downward Bias.

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

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

US Treasuries did not continue higher. In fact Monday confirmed the Evening Star reversal lower and it did not look back. It fell the rest of the week ending with a close of the gap from September 28th. The RSI on the daily chart is hovering around the mid line but falling while the MACD is about to cross lower. After a lower high this seems set up for a lower low. The weekly chart shows more consolidation in a tightening range. The RSI is holding near the mid line with the MACD flat. There is resistance at 122.50 and 123.50 followed by 124 and 124.60 before 126. Support lower comes at 120.25 and 118.50 followed by 117.50. Short Term Downward Bias in the Consolidation.

Shanghai Stock Exchange Composite Daily, $SSEC

Shanghai Stock Exchange Composite Weekly, $SSEC

The Shanghai Composite started trading again Thursday after a week off. And it had some ground to make up so opened with a gap up and held that through Friday. The 3000 to 3200 range is still in control ion the daily chart with the RSI rising and the MACD following higher as well. The weekly chart shows continued consolidation under the important 3200 level. The RSI is starting to show signs of a turn higher while the MACD is falling. There is support at 3055 and 2915 followed by 2820. Resistance higher stands at 3280 and 3360 followed by 3420. Continued Consolidation.

iShares MSCI Emerging Markets Index Daily, $EEM

iShares MSCI Emerging Markets Index Weekly, $EEM

Emerging Markets showed continuation of the move higher to end last week. A gap up Monday and another gap Wednesday ended up drifting higher to end the week. The daily chart shows the Bollinger Bands opening to allow more upside while the MACD is rising along with the RSI. The weekly chart shows the move stalling right at the bottom of the 6 year channel it broke to move lower. Support may now become resistance. The RSI on this timeframe is rising but still short of the mid line while the MACD is turning up. There is resistance at 36 and 37 followed by 38. Support lower comes at 34.40 and 31.80 followed by 30. Upward Bias.

VIX Daily, $VIX

VIX Weekly, $VIX

The Volatility Index started the week on the edge of a move back into the normal range. Monday saw it crack 20 and then it continued lower the rest of the week. It closed the week over the 200 day SMA though, the last barrier before an all clear and a signal for new highs in the S&P 500 to come. The daily chart shows the the RSI continuing to fall along with the MACD. The weekly picture shows a hard move lower with the RSI falling through the mid line and the MACD curled and about to cross down. There is support lower at 15.67 and 12.80 followed by 11.50 and 10. Resistance higher comes at 20 and 22 followed by 24 and 30. On the Edge of Return to Normal Volatility.

SPY Daily, $SPY

SPY Weekly, $SPY

The SPY came into the week following a strong Marubozu to close the prior week. Big hopes for more upside and it did not disappoint. Monday the SPY gapped higher and an inside day Tuesday got some worried. But Wednesday it continued higher and a strong day Thursday pushed through prior resistance. Friday held above that resistance, but printed a doji candle, signaling indecision. After the big 7.7% move higher many will look at the doji as a reversal but it can resolve either way. And the RSI on the daily chart continues higher, now on the edge of the bullish zone with the MACD strong and rising, supporting continuation. So does the rising Bollinger Band®. On the weekly chart the Marubozu candle for the week confirms the Hammer from last week as a reversal higher and calls for more. The RSI on this timeframe is now moving higher steeply and near the mid line with the MACD turning up from an extreme level that matched the low in 2011. There is resistance above at 202 and 204.40 followed by 206.40 and 208.40. Support lower comes at 200 and 199.5 followed by 198 and 196 before 193.40. Continued Upward Price Action.

IWM Daily, $IWM

IWM Weekly, $IWM

The IWM came into the week following a strong Marubozu as well. Monday it gapped higher over resistance and then continued the rest of the week. Friday also printed a doji candle. The RSI on the daily chart is continuing higher and on the edge of the bullish zone with the MACD strong and rising. On the weekly chart the near Marubozu candle for the week confirms the Hammer from last week as a reversal higher. The RSI on this timeframe is now moving higher with the MACD turning up. There is resistance above at 116 and 117 followed by 118.40 and 120. Support lower comes at 114.25 and 111.50 followed by 109.50. Upward Bias within the Consolidation.

QQQ Daily, $QQQ

QQQ Weekly, $QQQ

The QQQ also started the week following a strong Marubozu and gapping higher Monday over the 20 day SMA. It continued higher the rest of the week closing near the high. The RSI on the daily chart continues higher slowly as it gets to the edge of the bullish zone with the MACD strong and rising On the weekly chart the Hammer from last week was confirmed. The RSI is now moving higher and near the mid line with the MACD still running lower though. There is resistance above at 107.75 and 109 followed by 111.40 and 113.20. Support lower comes at 106.25 and 104 followed by 102.60 and 102. Continued Upward Price Action.

Heading into October Options Expiration week the equity markets are looking stronger, but have not all sent the all clear signal yet. Elsewhere look for Gold to continue its short term uptrend while Crude Oil does the same but might encounter resistance. The US Dollar Index has a short term bias lower for the week in the broad consolidation while US Treasuries are biased lower short term as well. The Shanghai Composite looks to continue in consolidation while Emerging Markets are biased to the upside. Volatility looks to return to more normal levels relieving the downward bias on the equity index ETF’s SPY, IWM and QQQ. Their charts all show strength continuing into next week but with the SPY the strongest followed by the QQQ and then the IWM on the longer term look. Use this information as you prepare for the coming week and trad’em well.

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