SPY Trends and Influencers May 30, 2020

• Posted by Greg Harmon
• on May 30th, 2020

Last week’s review of the macro market indicators saw heading into the Memorial Day Weekend and unofficial start of summer, equity markets posted a strong week with signs of potential range breaks to come. Elsewhere looked for Gold ($GLD) to continue to consolidate while Crude Oil ($USL) moved to the upside. The US Dollar Index ($DXY) continued to churn sideways while US Treasuries ($TLT) consolidated as well. The Shanghai Composite($ASHR) looked to be reversing lower while Emerging Markets ($EEM) consolidated under resistance. 

The Volatility Index ($VXX) looked to remain elevated and drifting lower easing the roadblocks in front of equity markets. Their charts were looking a bit stronger on the shorter timeframe and possibly on the edge of breaking consolidation to the upside. The one exception to this was the $QQQ which was in a full blown uptrend. On the longer timeframe all 3 Index ETF’s looked strong.

The week played out with Gold pulling back to retest the big round number and then quickly reversing back higher while Crude Oil hit a wall and has stalled moved into a range. The US Dollar breaking the range to the downside while Treasuries made lower lows. The Shanghai Composite found support and managed a small bounce while Emerging Markets held in consolidation.

Volatility drifted, but held in a very narrow range, shrinking the volatility of volatility. The equity markets responded with a gap up Tuesday following the holiday and then chop the rest of the week. There was some divergence with all the equity ETF’s moving up through Wednesday, but the IWM dropping harder Thursday and holding Friday while the SPY and QQQ ended the week strong at new highs. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week holding over the 61.8% retracement of the drop from February after a small move higher. It gapped up Tuesday and over the 200 day SMA, but could not hold there and finished just below it. Wednesday saw another move over the 200 day SMA hold up and despite a failed push higher Thursday it held up again. Friday started out moving lower and had a retest of the 200 day SMA hold, before a reversal late in the day to end higher. It ended the week at the highest level since March 4th and highest weekly close since February 21st.

The daily chart shows the RSI rising in the bullish zone with the MACD lifting out of a flat position and positive. The Bollinger Bands® opening higher. On the weekly chart there is a strong move higher over the 50 week SMA. The RSI is lifting off of the mid line with the MACD rising and crossed up but still negative. There is resistance at 305.50 and 309.75 then 313.50 and 320 before 323.75. Support lower comes at 302.50 and 300 before 297 and 294 then 291. Uptrend.

SPY Weekly, $SPY

The month of May is in the books, and equity markets have renewed their trends higher. Elsewhere look for Gold to consolidate in its uptrend while Crude Oil may be resuming its uptrend. The US Dollar Index is starting to move lower while US Treasuries consolidate. The Shanghai Composite looks to continue the broad drift sideways while Emerging Markets consolidate in their uptrend.

The Volatility Index looks to continue to drift lower making the path easier for equity markets to the upside. Their charts also look strong, especially on the longer timeframe. On the shorter timeframe the QQQ is breaking out of consolidation with the SPY pushing higher and the IWM consolidating the range break over support. 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 May 29, 2020  

Don’t miss out on the Memorial Day Sale. Get an annual subscription for 38.2% off. Subscribe here.

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