SPY Trends and Influencers March 5, 2016

• Posted by Greg Harmon
• on March 5th, 2016

A weekly excerpt from the Macro Review analysis sent to subscribers on 10 markets and two timeframes.

Last week’s review of the macro market indicators which with just a Leap Day left in February saw the Equity markets looked ready to spring higher. Elsewhere looked for Gold ($GLD) to continue to consolidate in its uptrend while Crude Oil ($USO) consolidated the recent move higher.

The US Dollar Index ($UUP) also looked to continue to move sideways but with an upward bias short term while US Treasuries($TLT) were showing signs of topping in their uptrend. The Shanghai Composite ($ASHR) seemed ready for more downside, at least in the short term, while Emerging Markets ($EEM) were biased to the upside next week.

Volatility ($VXX) looked to continue the move lower towards normal levels easing the pressure for the equity index ETF’s $SPY, $IWM and $QQQ. Their charts all looked better to the upside in the short term, with very constructive movement higher out of the 2016 range for the SPY and IWM. The QQQ lagged behind but only just slightly.

The week played out with Gold waiting until late Thursday to break higher on the week while Crude Oil just continued to climb. The US Dollar met resistance and turned back lower while Treasuries moved lower. The Shanghai Composite bounced off of a double bottom while Emerging Markets ripped to the upside.

Volatility continued the move lower making a new low for 2016. The Equity Index ETF’s started the week well marching higher into March and just kept going. All finally broke above their consolidation ranges for the first 2 months of the year. What does this mean for the coming week? Lets look at some charts.

SPY Daily, $SPY

The SPY started the week pulling back from the break out over the two month consolidation after the move lower to start the year. But Tuesday reversed that higher with a bullish kicker candle that continued higher the rest of the week. It finished the week over the 100 day SMA for the first time this year with a Spinning Top signaling indecision.

The Bollinger Bands® are opening to the upside allowing a further move higher, and the RSI on the daily chart is bullish and rising along with the MACD. These all support further upward price movement. On the weekly chart the strong candle came to the 100 week SMA and the prior support area. The RSI on this timeframe is rising through the mid line while the MACD is about to cross up. Just getting started.

There is resistance higher at 201.50 and 203.75 followed by 205 and 207. Support lower comes at 200 and 199 followed by 198.5 and 196 before 194.50. Continued Upward Price Action.

SPY Weekly, $SPY

Heading into the next week the equity markets look to be on the verge of a major reversal higher. Elsewhere look for Gold to continue higher in its uptrend along with Crude Oil. The US Dollar Index looks weak short term in consolidation while US Treasuries are biased lower. The Shanghai Composite and Emerging Markets are biased to the upside in the short run.

Volatility looks to continue toward the normal range with a bias lower, adding a breeze to the backs of the equity markets. The equity index ETF’s SPY, IWM and QQQ, look better to the upside, with the SPY and IWM showing strength in break a range higher, while the QQQ lags behind but also looks better to the upside. Use this information as you prepare for the coming week and trad’em well.

 

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