SPY Trends and Influencers January 11, 2020

• Posted by Greg Harmon
• on January 11th, 2020

Last week’s review of the macro marketindicators saw the decade had ended and a new one had begun, with equity markets looking extended. Elsewhere looked for Gold ($GLD) to continue higher while Crude Oil ($USO) moved to the upside. The US Dollar Index ($DXY) continued to look better to move lower while US Treasuries ($TLT) paused in their downtrend. The Shanghai Composite ($ASHR) looked poised to continue higher along with Emerging Markets ($EEM) which were breaking above long term resistance. 

The Volatility Index ($VXXB) looked to remain low making the path easier for equity markets to the upside. Their charts looked strong on the longer timeframe, but were starting to get extended. On the shorter timeframe the $IWM was retracing while the $SPY looked like it might pause with the $QQQ continuing to race higher but the most extended.

The week played out with Gold spiking up to meet resistance and then dropping back near unchanged while Crude Oil also spiked and then fell, but ended lower on the week. The US Dollar inched up but remained below the prior high while Treasuries continued lower until finding support late in the week and bouncing. The Shanghai Composite consolidated following the move higher while Emerging Markets were smacked early but back at short term highs by Friday.

Volatility opened higher Monday but then gave back ground all week. This put initial pressure on equities but then allowed for more upside late in the week. The SPY and QQQ continued on their paths higher, making new all-time highs the back half of the week. The IWM remains the enigma, with a strong looking chart but the price action holding in a narrow range all week. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week just off of the all-time high. It opened slightly lower Monday, bringing it near the 20 day SMA, but rose all day. Tuesday it stalled in an inside day but then Wednesday it resumed the path higher, making a new intraday high before profit taking. Thursday it rose and held, closing at a new all-time high. Friday started to the upside but moved lower throughout the day, ending in a bearish engulfing candle. But it also moved out of consolidation.

The daily chart shows the RSI diverging lower but deep in the bullish zone, with the MACD turning up and positive. The Bollinger Bands® are tightening. The weekly chart shows a strong move to the upside following the doji last week. The RSI is overbought, but only marginally with the MACD rising and bullish. It is now very close to the target of 330 out of the ascending triangle. There is resistance at 327.50. Support lower comes at 324.90 and 322 then 320 and 319 before 315.60. Uptrend.

SPY Weekly, $SPY

With the first full week of the New Year in the books, equity markets range from being a bit extended to digesting the move in a pullback. Elsewhere look for Gold to pause in its uptrend while Crude Oil pulls back in consolidation. The US Dollar Index continues in a short term decline while US Treasuries pause in their downtrend. The Shanghai Composite looks to pause in its move higher while Emerging Markets continue to drive higher.

The Volatility Index looks to remain very low making the path easier for equity markets to the upside. Their charts are mixed with the IWM pulling back in the short term while the SPY and QQQ digest new highs from Thursday. All look stronger on the longer timeframe. 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 January 10, 2020  

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