Macro Week in Review/Preview November 22, 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 to drift lower in consolidation while Crude Oil marked time moving sideways. The US Dollar Index was drifting to the upside while US Treasuries bounced in their pullback.

The Shanghai Composite looked to drift down in consolidation while Emerging Markets remained in broad consolidation.  Volatility 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.

Gold Daily, $GC_F

Gold Weekly, $GC_F

Gold started the week in a stalled bounce. It held there through Wednesday before it turned to the downside Thursday. It tried to bounce Friday but could not hold up and dropped back to finish the week lower. The daily chart shows the RSI turned back under the mid line with the MACD flat and negative.

The weekly chart shows the bull flag continuing to build. The RSI has reset to near the mid line with the MACD pulled back substantially but positive. The Bollinger Bands have squeezed in on this timeframe as well. There is resistance at 1475 and 1500 then 1535 and 1550. Support lower comes at 1450 and 1425 then 1400 and 1365. Pullback Continues.

West Texas Intermediate Crude Daily, $CL_F

West Texas Intermediate Crude Weekly, $CL_F

Crude Oil was consolidating after a move higher as the week began. It dropped through Tuesday, finding support under the 50 day SMA and then reversed Wednesday. The move higher continued the rest of the week. The daily chart shows the RSI pushing up into the bullish zone with the MACD rising and positive.

On the weekly chart price remains in broad consolidation with the Bollinger Bands squeezing in. The RSI is rising through the mid line with the MACD about to turn positive. There is resistance at 59 and 60 followed by 61 and 62 then 64. Support lower comes at 56 and 55 then 53.50 and 52.50 followed by 51.40. Rise in Broad Consolidation.

US Dollar Index Daily, $DX_F

US Dollar Index Weekly, $DX_F

The US Dollar Index was pulling back from a higher high when the week started. It continued Monday but then found support Tuesday at a higher low and reversed. It then rose the rest of the week. The daily chart shows price lifting off of the 20 day SMA with the RSI rising through the mid line and the MACD turning positive as it moves up.

The longer weekly chart shows the rising channel still plugging along. The Bollinger Bands are squeezing here as well. The RSI is holding at the mid line with the MACD flat but positive. There is resistance above 98.30 at 99 and 100 then 101.25. Support lower comes at 97.40 and 96.50 then 95 and 94. Drifting Higher.

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

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

US Treasuries were moving higher off of a touch at trend support when the week began. They continued to move higher through Wednesday, stalling just short of the late October high. They held there the rest of the week. The daily chart shows the RSI over the mid line but turned flat short of the bullish zone. The MACD is rising but negative.

The weekly chart shows the stall just above the 20 week SMA. The RSI on this timeframe is bouncing off of the mid line after a pullback with the MACD dropping. There is resistance at 141.70 and 143.50 then 145.50 before 148.60. Support lower comes at 138.60 and 137.60 then 135.80 and 134.60. Bounce in Downtrend.

Shanghai Stock Exchange Composite Daily, $SSEC

Shanghai Stock Exchange Composite Weekly, $SSEC

The Shanghai Composite was making 6 week lows as the week started. It held in place Monday and then started higher Tuesday, only to give up the gain and end lower on the week. The daily chart shows the separation building between price and the 200 day SMA. The RSI is falling and in the bearish zone with the MACD negative and dropping.

On the weekly chart the price is falling away from the 200 week SMA. The RSI is dropping through the mid line with the MACD falling and near a turn negative. There is support lower at 2800 and 2700 then 2650. Resistance above is at 2900 and 2940 then 3000 and 3040 before 3120. Drop in Broad Consolidation.

iShares MSCI Emerging Markets Index Daily, $EEM

iShares MSCI Emerging Markets Index Weekly, $EEM

Emerging Markets had found support and bounced after a pullback as they came into the week. They held there Monday and then started lower again, locking in a lower high. The daily chart shows the RSI flat at the mid line with the MACD dropping slowly but positive.

The longer weekly chart shows more churn in broad consolidation under long term resistance. The RSI is turning back short of a move into the bullish zone with the MACD leveling but 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. Broad Consolidation.

VIX Daily, $VIX

VIX Weekly, $VIX

The Volatility Index had a very uneventful week. It started under 13, spiked all the way up to 14 then fell back and close nearly unchanged. This is the definition of low volatility. The daily chart shows the MACD starting to turn up and the Bollinger Bands tight as it sits at support.

The weekly chart shows a doji at support. The RSI is also at support with the MACD dropping ad negative. There is support lower at 11.50 and 10. Resistance above 12.40 comes at 13.50 and 15.67 then 18 and 22 before 26. Very Low Volatility.

SPY Daily, $SPY

SPY Weekly, $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 333 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.

IWM Daily, $IWM

IWM Weekly, $IWM

The IWM came into the week sitting at the top of the long term range it has traded in 2019, and above short term support. It held there all week as the 20 day SMA rose to meet it. The daily chart shows the RSI holding and possibly turning back up, in the bullish zone, with the MACD leveling after a small pullback. The Bollinger Bands® are also squeezing in, often a precursor to a move.

The weekly chart shows the small body candles consolidating at resistance. The RSI on this timeframe is flat just under a move into the bullish zone with the MACD rising and positive. There is resistance above 159 and 160.80 then 163 and 165 before 167. Support lower comes at 157.50 and 155 then 154 and 152.50 before 150.50. Broad Consolidation.

QQQ Daily, $QQQ

QQQ Weekly, $QQQ

The QQQ also 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 Tuesday as well. It pulled back from there to the 20 day SMA to end slightly lower. The daily chart shows the RSI flat in the bullish zone after a pullback, with the MACD rolling over. The Bollinger Bands® are contracting. The target on the break to 212 remains above.

The weekly chart shows the break out higher with a doji on the week. The RSI on this timeframe is strong in the bullish zone with the MACD rising and positive. There is resistance above at 202 and 202.75 then 203.80. Support lower comes at 200.80 and 199.25 then 198.90 and 196 before 194.50. Uptrend.

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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