Macro Week in Review/Preview February 1, 2019

• Posted by Greg Harmon
• on February 1st, 2019

Last week’s review of the macro market indicators noted heading into the last week of January equities had taken a pause but remained in their uptrends. But they also remained short of declaring that the correction is over. Elsewhere looked for Gold to pause in its uptrend while Crude Oil paused in its move higher. The US Dollar Index was back in broad consolidation while US Treasuries paused in their uptrend.

The Shanghai Composite was building the case for a possible reversal higher while Emerging Markets were building a reversal as well.  Volatility looked to remain muted keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts remained strong in the short timeframe and just short of full bullish on the longer timeframe.

The week played out with Gold refusing to pause and continuing higher while Crude Oil started lower but reversed to finish up on the week. The US Dollar pulled back to the January lows while Treasuries were steady after a blip fell back Friday. The Shanghai Composite held over its moving average and breakout levels while Emerging Markets continued their move higher.

Volatility held in a tight range in the teens, and drifting lower keeping the bias higher for equities. The Equity Index ETF’s all moved higher on the week with the QQQ leading the way but the SPY and IWM also with sizable gains. All three are still yet to make a higher high though. What does this mean for the coming week? Let’s look at some charts.

Gold Daily, $GC_F

Gold Weekly, $GC_F

Gold came into the week back at resistance just under 1300. The Bollinger Bands® had squeezed and then Monday they opened. Gold sat steady and then started higher again Tuesday to a top Thursday and held there. The daily chart shows it outside of the Bollinger Bands so a pause may be in order, with the RSI slightly overbought and the MACD rising.

On the weekly chart it printed a strong candle higher breaking through 1300. The RSI is strong and rising with the MACD moving up and positive. There is resistance above at 1345 and 1365 then 1400. Support lower comes at 1315 and 1300 then 1278 and 1265. Uptrend.

West Texas Intermediate Crude Daily, $CL_F

West Texas Intermediate Crude Weekly, $CL_F

Crude Oil was bouncing off of resistance but over the 50 day SMA at the start of the week. It dropped to touch it Monday and then moved higher the rest of the week, ending over resistance. The daily chart has the RSI bouncing along between 50 and 60 with the MACD positive and slowly rising.

The longer timeframe had Crude oil holding over the 200 week SMA. With the move higher this week it is approaching the 100 week SMA. The RSI on this timeframe is moving toward the mid line with the MACD about to cross up. There is resistance at 56 and 58 then 60 and 62.50. Support under 55 comes at 53.50 and 51.50 then 50.40 and 49. Uptrend.

US Dollar Index Daily, $DX_F

US Dollar Index Weekly, $DX_F

The US Dollar Index was pulling back from its 50 day SMA as the week started. It continued lower through Wednesday, eventually touching the 200 day SMA for the first time in nearly 8 months. It held there the rest of the week. The RSI on the daily chart shows it sitting on the 40 line, continuing the no directional bias between 40 and 60, while the MACD is negative and falling again.

The weekly picture shows the 200 week SMA taking control and driving it lower. The RSI on this timeframe is holding over the mid line and bullish with the MACD falling but still positive. There is support at 95 and 94 then 93 and 92. Resistance higher comes at 96.50 and 97.40 then 98.30 and 99. Broad Consolidation.

iShares Barclays 20+ Yr Treasury Bond Fund Daily, $TLT

iShares Barclays 20+ Yr Treasury Bond Fund Weekly, $TLT

US Treasuries entered the week holding at their 20 day SMA after a bounce. They continued to hold there until a gap up Thursday. But Friday printed a bearish Kicker candle driving lower and boding for more downside. The daily chart shows the RSI holding in the bullish zone with the MACD avoiding a cross up.

The weekly chart shows the price touching resistance before pulling back. The RSI is holding over the mid line and bullish with the MACD leveling but positive. There is resistance at 122 and 123.25 then 124.25 and 125.25. Support comes lower at 120.25 and 118.20 then 116.20. Consolidation at Resistance.

Shanghai Stock Exchange Composite Daily, $SSEC

Shanghai Stock Exchange Composite Weekly, $SSEC

The Shanghai Composite was moving higher, showing signs of a reversal, as the week began. It started to pullback in a bull flag early in the week and then closed it out with a strong move higher. The daily chart has a RSI rising toward a shift to bullish with the MACD leveling but positive.

The weekly chart shows the bounce continuing but still short of the November high. The RSI is moving along in the bearish zone while the MACD is diverging to the upside. There is resistance at 2650 and 2700 then 2800 and 2900. Support lower comes at 2535 and 2450 then 2320. Possible Reversal Building.

iShares MSCI Emerging Markets Index Daily, $EEM

iShares MSCI Emerging Markets Index Weekly, $EEM

Emerging Markets were holding over trend resistance as the week started. They pushed higher through out the week, closing Thursday over the 200 day SMA for the first time since June. The daily chart shows the RSI into the bullish zone with the MACD rising and positive.

The longer timeframe shows the 6th consecutive week moving higher and the first higher high. The Bollinger Bands® are opening higher with the RSI pushing up through the mid line. The MACD is rising and close to turning positive. There is resistance at 44 and 46 then 48 and 50. Support lower comes at 42.25 and 41 then 40 and 38.80. Reversal.

VIX Daily, $VIX

VIX Weekly, $VIX

The Volatility Index was at the 144 day SMA as the week started and it bounced Monday. The bounce held Tuesday and then it started moving back lower ending the week below the SMA’s and at what has been support since October. The daily chart shows the RSI at support and the MACD falling and negative.

The weekly chart shows the move lower and the RSI breaking the mid line. The MACD is falling fast as well but still positive. There is support at 15.67 and 12.40 then 11.50 and 10. Resistance comes at 18 then 22 and 26 before 31 and 45. Low and Falling Volatility.

SPY Daily, $SPY

SPY Weekly, $SPY

The SPY came into the week pausing and consolidating the secondary move off of the December low. It held there early in the week and then started moving higher Wednesday. The move continued the rest of the week, ending the week in the middle of the channel that held it from October to December.

The daily chart shows it at the 100 day SMA, with a near doji to end the week. The RSI is rising and in the bullish zone with the MACD rising and positive. It is still short of the 281 level to make a first higher high though. Another good week but not at the all clear level yet.

The weekly chart shows a resumption of the uptrend and to the 50 week SMA. The RSI is poking over the mid line with the MACD crossing up. There is resistance at 271.40 and 272.50 then 274.50 and 277.50. Support lower comes at 269 and 265 then 263 and 261. Uptrend.

IWM Daily, $IWM

IWM Weekly, $IWM

The IWM came into the week pausing and consolidating the move off of the December low. It held there early in the week and then started moving higher Wednesday continuing the rest of the week, ending at a 2 month high. The daily chart shows the RSI is rising and in the bullish zone with the MACD rising and positive.

The weekly chart shows the 6th consecutive week moving higher. The RSI is at the mid line with the MACD crossing up. There is resistance at 150.50 and 152.50 then 154 and 155. Support lower comes at 148 and 145.75 then 143 and 142.25. Uptrend.

QQQ Daily, $QQQ

QQQ Weekly, $QQQ

The QQQ came into the week pausing and consolidating the secondary move off of the December low. It started moving higher Wednesday and met the 100 day SMA to end the week. The daily chart shows the RSI is rising and in the bullish zone with the MACD rising and positive.

The weekly chart shows a resumption of the uptrend and to the 20 week SMA. The RSI is breaking over the mid line with the MACD crossing up. There is resistance at 167.50 and 169.50 then 170.95 and 173. Support lower comes at 165.50 and 162.80 then 161.20 and 160.50. Uptrend.

With January in the books as the best in 30 years and the first week of February ahead, equity markets continue to look strong as they push higher. Elsewhere look for Gold to continue in its uptrend while Crude Oil looks to break higher as well. The US Dollar Index continues to mark time moving sideways while US Treasuries are at resistance. The Shanghai Composite is building a reversal and Emerging Markets have confirmed a reversal higher.

Volatility looks to remain low and falling keeping the breeze at the backs of the equity index ETF’s SPY, IWM and QQQ. Their charts show a possible pause in the short term but the longer picture continues to look strong, as they close in on printing the first higher high since the drop. Use this information as you prepare for the coming week and trad’em well.

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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