SPY Trends and Influencers November 23, 2019

• Posted by Greg Harmon
• on November 23rd, 2019

Last week’s review of the macro market indicators saw with November options expiration in the books that equity markets were surging. Elsewhere looked for Gold ($GLD) to drift lower in consolidation while Crude Oil ($USO) marked time moving sideways. The US Dollar Index ($DXY) was drifting to the upside while US Treasuries ($TLT) bounced in their pullback.

The Shanghai Composite ($ASHR) looked to drift down in consolidation while Emerging Markets ($EEM) remained in broad consolidation.  Volatility ($VXXB) continued to remain very low keeping the bias higher for the equity index ETF’s $SPY, $IWM and $QQQ. The SPY and QQQ looked to continue the march higher while the IWM continued to churn in a wide consolidation at long term resistance.

The week played out with Gold holding early before dipping late in the week while Crude Oil bounced around in a slightly wider range than the past two weeks. The US Dollar found support after a small digestion and reversed while Treasuries continued higher, but remained short of making a higher high. The Shanghai Composite tried to move higher early but could not hold up and fell back to the lows while Emerging Markets held in a narrow range.

Volatility did not move much during the week, holding near 13, keeping the positive reinforcement behind equities. The Equity Index ETF’s started the week moving higher, with the SPY and QQQ making new all-time highs through Tuesday, but then took a rest and pulled back slightly the rest of the week. The two remained above short term moving averages and continue to look positive. The IWM continued to move in its own world, stalling out at the top of the long term resistance range. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week sitting at a new all-time high after a gap up to end the prior week. It made another high Monday and then started higher Tuesday as well. But it was time for a pause as it could not hold up and fell back after a 5 day win streak. It continued lower Wednesday, filling the gap, and into Thursday. Friday saw a small bounce to end the week slightly lower.

The daily chart shows the RSI turning back up, deep in the bullish zone, with the MACD leveling after a small pullback. The upper side of the Bollinger Bands® has flattened as well. The target on the triangle break of 330 remains above with a second target to 350 above that. The weekly chart shows the break out higher clearly.

The RSI on this timeframe is strong in the bullish zone with the MACD rising and positive. Both indicators have more room to run until they start showing overbought. There is no resistance above 312.70. Support lower comes at 310 and 307.50 then 304.50 and 302.25 before 301 and 300. Uptrend.

SPY Weekly, $SPY

Heading into the shortened Thanksgiving week equity investors have a lot to be thankful for with stock prices sticking near all-time highs. Elsewhere look for Gold to continue the pullback while Crude Oil rises in consolidation. The US Dollar Index looks to continue to drift higher while US Treasuries bounce in their downtrend. The Shanghai Composite is pulling back in consolidation while Emerging Markets mark time moving sideways at resistance.

Volatility remains very low keeping the bias to the upside for the equity index ETF’s SPY, IWM and QQQ. The SPY and QQQ both sit above the 20 day SMA’s and look strong after a digestive week while the IWM continues to churn in a wide consolidation. Use this information as you prepare for the coming week and trad’em well.

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