From the Charts: Macro Week in Review/Preview September 10, 2010

We came into this holiday shortened week expecting stronger prices for Gold again. The US Dollar Index and US Treasury Bonds were poised to continue their moves lower. Oil was set up for a move higher but without much room before it runs into a wall of resistance. A relatively low volatility index was creating the environment for stocks to push higher, also without a lot of room before resistance. I detailed this in the broad market trend reviewed Friday September 3rd. The week started as expected…for Gold anyway and nothing else. The US Dollar Index and US Treasuries bounced, and Oil and stocks sold off Tuesday. After a little ping pong the week now ended as expected for all indicators except Gold which ended flat and the US Dollar Index which rose slightly. There are some changes in expectation for next week. Let’s look at the charts.

Gold Daily

Gold Weekly
Gold raced up to test the 1255 resistance level and then pulled back to 1245 support on Thursday. The support level held on Friday but the Moving Average Convergence Divergence (MACD) is now crossing on the daily chart, indicating an open environment to pullback further. There is support at 1237, 1233 and 1220. the weekly chart looks like a glass ceiling at 1255 which it cannot crack. If it can there is resistance at 1328 higher. I still expect it to reach new highs, but it may pullback first.

West Texas Intermediate Crude Daily

West Texas Intermediate Crude Weekly
West Texas Intermediate Crude seems to be breaking out of the 3 week flag to the upside. I have noted in the past that if it did there is a lot of resistance from both the daily and weekly charts at the Simple Moving Average (SMA) levels above. Friday oil blew through he flag resistance at 75.80, now support, and stopped right at the 50/100 day SMA cross near 76.50. The weekly set of SMA’s are also very near by now as resistance at 77.30-.82. There is resistance higher at 77.78 on the daily chart and support lower at 74.80-75. Above the bands of SMA’s the weekly chart shows resistance at 81.50 and also adds support lower at 72 and then 71.19. I expect it might take some time to get through this resistance but expect a big pop if it happens quickly.

US Dollar Index Daily

US Dollar Index Weekly
The US Dollar Index popped to the 20/50 day SMA cross and held there all week. There is resistance higher at 83.50 and then 84 and support lower at 82 all from the daily chart. The flat MACD and RSI give no clue to a future move. The weekly chart shows the beginning of a flag forming above the 82.08 support level. It also shows resistance at 83 and then 84.01 higher and support at 81.64and then 80.58. There might be a slight bias to the upside from the weekly chart with the rising SMA’s and hold of support.

iShares Barclays 20+ Yr Treasury Bond Fund Daily

iShares Barclays 20+ Yr Treasury Bond Fund Weekly
My proxy for US Treasury Bonds, the TLT, jumped up Tuesday and proceeded top fall the rest of the week. It ended the week holding support of the 101.77-102.10 area. There is support lower at 100 and then 98. If it catches a bounce resistance can be found at 104 followed by 104.8 and 106. The weekly chart filled the gap from early August and and looks to be headed lower. It adds 102 as a support level and resistance higher at 108. The trend is clearly lower now.

VIX Daily

VIX Weekly
The Volatility Index held support of the bottom of its channel at 21.80, barely. There is support lower at 18 from the daily chart and 16.93 from the weekly. If it continues to hold there is resistance at the 200, 50 and then 100 day SMA’s on the way to 28.40 on the daily chart. On the weekly chart adds resistance at 23.88 then 26.09 and 28. It looks to test the bottom of both channels again.

SPY 60 minute

SPY Daily

SPY Weekly
Although the SPY looks to be heading to a test of the 113.20 channel top, the 60 minute chart exhibited a bearish divergence between the price action and the MACD this week. It does look like it may resolve shortly and did not show up in the RSI so it is just a point of note right now. The daily chart printed an Inside Day today, a sign of indecision, with 111.19 as support and then 110.27 and 109.40 lower. It shows resistance at 112 and then 113.20. the weekly chart adds to the picture with a bullish move above the 20/50 week SMA cross above 110. It adds a resistance point higher at 114.67 and support lower at 106 and then 104.35. There is more room still to the upside.

IWM Daily

IWM Weekly
IWM also had an indecisive Inside Day, finishing below resistance at 64.33 with 64.91 as resistance higher. There is support below at 62.83-63 and then 61.84 from the rising 50 day and 20 day SMA’s, respectively. It looks good to go higher still. The weekly chart shows the range between the SMA’s and 58.68 holding up with this week’s candle squeezed by the 20, 50 and 200 week SMA’s. There is resistance higher on the weekly chart at 67.50, and support lower at 61 before testing 58.68. The MACD on the weekly looks to be turning and crossing adding to the bull case.

QQQQ Daily

QQQQ Weekly
The Q’s also had an Inside Day but well above the 100/200 day SMA cross. There is support at the 45.18-.25 area and then 44.50 below that. Resistance comes first at 46.75 and then 47.10 followed by 47.60. The Q’s crossed the 20 week SMA on the weekly chart which will now act as support. There is further support lower at 45.19 and 43.80. Resistance occurs at 46.60 and then 47.20 and 47.60 on the weekly chart. It must get through all those points to have a chance at changing the trend from flat to up. It is a bit troubling that the 20 Week SMA is about to cross down trough the 50 week SMA with the other SMA’s flat. There is some room higher but keep an eye on that cross.

So next week looks like there may be a pullback or at least a rest for Gold and a rest or maybe a rise for the US Dollar Index. US Treasury Bonds are on support but look weak and headed lower. Although Oil looks strong it is at resistance and may need some time to work through it. Volatility seems to have found a bottom, although still weak, which should allow stocks to continue their move higher, towards a test of the top of the four month (or maybe one year) channel. Good luck next week!

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.

From the Charts: Macro Week in Review/Preview 7-10-2010

Going into this past week all the equity index ETF’s had come off of a weak performance and still looked weak both on the daily and weekly charts. Perhaps a bit stronger on the dailies as many were right on top of some support. Gold looked to have settled after a plunge, but also weak. Oil and the dollar index also had weak performance and looked like they were still searching for a bottom. So the set up was for another week of weakness, with a slight chance of a bounce in equities. That did not last much beyond the futures open Monday night.

By Tuesday morning the sentiment for the equity ETF’s had changed from weakness to at least basing and by Wednesday it was up, finishing the week strongly. Gold, oil and the dollar however, behaved as expected. Lets look at the details:

Gold Daily

Gold Weekly

Gold established a flagging pattern this week. As suggested the 1185 weekly support was tested and held, but it could not retake and hold above the 1211 resistance or the 50SMA on the daily at 1216. A flag after the large drop would suggest a continuation lower to test the 100SMA at 1171 or the 1164 tops from early this year, but the hammer on the weekly suggests a reversal, if confirmed. If the 1185 level is breached on a close then it will go lower, otherwise expect a range with 1216 remaining resistance, with a break above confirming the reversal.

Oil Daily

Oil Weekly

Oil broke above a tight range this week when it pierced through the 50SMA Friday. The daily picture now confirms a new range between 76 and 82, but with the 100 and 200SMAs in between to dampen moves. the weekly picture printed a piercing candle, also giving credence to a higher range. Resistance on the weekly is clustered at the tight $2.50 range between the 20/50/200 week SMAs at 76.-78.68. This tells me if it gets to the top of the range it may get strong support at 79.

US Dollar Index Daily

US Dollar Index Weekly

The US Dollar Index resumed its fall and looks to continue next week as it is establishing another bear flag on the daily. The weekly chart shows a continued move lower. Both time frames point to support at the 83.30 area, the 100day SMA and the 20wk SMA. If it breaks below there is support at 82.25 on both charts. Resistance above is now at the 84.50-85 area.

VIX Daily

VIX Weekly

The VIX is setting up for a stall or reversal at the 200SMA where it has a history of support/resistance lately as seen by the 4 recent bounces there. The weekly view supports this thesis. If support is not held then the weekly chart shows the downtrend line around 18 as next support and is confirmed in the daily. The 28 area has been a node of resistance/support and will act that way on a bounce off of the 200SMA higher.

SPY 60 Min

SPY Daily

SPY Weekly

I put the 60 minute chart up to show just how congested the history has been between 106.84 and 110.76. There will be a lot of chop in this range. Moving to the daily chart, the long term down trend line from September 2007 highs comes into play at 108.80. Add to that the weekly printed an inside candle and resistance above at 108.51. I take from this that a move above 108.80 will chop until can get through 110.40, but if rejects at 108.80 the support should be at the 104.38-.75 area.

IWM Daily

IWM Weekly

The daily chart shows resistance at the 200SMA very near and above that 65.57 form the 50SMA. Support comes from the 61.50 box bottom and then 58.40 below. Moving to the weekly, the inside candle straddling the 50wk SMA also shows support around the 58.80 area and resistance at 64.78 200wk SMA. looks like a range this week to me with a bias to setting a lower high from the falling 50day SMA.

QQQQ Daily

QQQQ Weekly

The daily chart shows a new rising trend forming but overhead resistance near where the 50 and 200 SMA are due to cross soon near 45.40. The weekly shows 45.70 as resistance. Volume on this run up has been divergent as it is falling. The daily chart sees support at 43.50 from May-June and then 42 – 42.50, with the weekly seconding that with support at 42.78 from February and 42.28, the 200wk SMA. Note that the weekly printed an inside candle on this chart as well, leading me to look for a range week up coming.

That is it for the broad market. Looks most likely a range bound week for equities with a bias to the top of the range. I will post some individual names this weekend and Top 10 Ideas Sunday. Have a great weekend!

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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