SPY Trends and Influencers April 21, 2018

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 noted heading into April options expiration the equity markets poked above consolidation in a signal of strength but had trouble holding it Friday. Elsewhere looked for Gold ($GLD) to consolidate with a bias higher while Crude Oil ($USO) continued its run higher. The US Dollar Index ($DXY) continued to move sideways while US Treasuries ($TLT) consolidated with a bias higher.

The Shanghai Composite ($ASHR) and Emerging Markets ($EEM) looked to continue to consolidate, with the Chinese market near lows and Emerging Markets at highs. Volatility ($VXX) looked to continue to drift lower easing the pressure on the equity index ETF’s $SPY, $IWM and $QQQ. Their charts had pressed higher in the shorter timeframe but printed an ugly Friday. On the longer timeframe they looked to be reversing higher though, a time divergence.

The week played out with Gold trying to push higher mid-week but falling back and ending lower while Crude Oil settled early in the week before moving higher. The US Dollar continued sideways with a slight drift higher while Treasuries broke their consolidation but to the downside. The Shanghai Composite broke down to a lower low while Emerging Markets continued in their tightening range.

Volatility continued to drift lower but meet support mid-week, arresting the energy it had been giving to equities. The Equity Index ETF’s moved higher early in the week, topped out Wednesday and then dropped lower, closing their early week gaps by the end of the week. All 3 ETF’s managed a gain or the week, but with an ugly last day. What does this mean for the coming week? Lets look at some charts.

SPY Daily, $SPY

The SPY came into the week with a mixed picture. It had finally broken above the March/April bottoming range, but it also printed a bearish engulfing candle to end the week. So when it moved higher Monday it brought promise with it. Continuation Tuesday and Wednesday saw it at the top of the Bollinger Bands®, which had narrowed considerably. The SPY fell back from there ending the week at new support, at what was prior resistance during the bottoming consolidation.

The good news is that the support has held for now. The bad news is that it has also made a lower high. Take your pick. The daily chart shows the RSI topped out under 60, not quite a move into the bullish zone, and is now pulling back. The MACD also turned to level just as it was about to turn positive. Ugh.

On the weekly chart add in a possible Shooting Star, a reversal if confirmed lower next week. The RSI is holding at the mid line on this timeframe with the MACD slowing its angle of descent and still positive. There is support lower at 265 and 262.50 followed by 260 and 257. Under that and bears flock in. Resistance above is at 267.50 and 269 then 272 and 275. It will take a higher high, over 280, to start to end this malaise. Consolidation.

SPY Weekly, $SPY

April options expiration is in the rearview mirror as the markets head into the last full week of April trading. Here in Northeast Ohio the weather is mixed with sunshine but very cold temperatures and some snow, hardly spring time, and stocks look the same, confused, sometimes strong and then weak again.

Elsewhere look for Gold to consolidate in a broad range while Crude Oil continues to be the strongest market rising higher. The US Dollar Index churns along sideways while US Treasuries are now in a downtrend. The Shanghai Composite has also turned downward while Emerging Markets continue to mark time at the highs.

Volatility has been stuck in a more normal range and does not look to be changing that anytime soon. This has left the equity index ETF’s SPY< IWM and QQQ to blaze their own path. Their charts continue to frustrate in the short term, falling back from lower highs, but longer term continue to consolidate in broad ranges at the top. Use this information as you prepare for the coming week and trad'em well. Join the Premium Users and you can view the Full Version with 20 detailed charts and analysis: Macro Week in Review/Preview April 20, 2018

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.

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