Macro Week in Review/Preview June 10, 2011 (Chart Fearing Version)

• Posted by Greg Harmon
• on June 11th, 2011

Last week’s review of the macro market indicators looked to continue the trend higher for Gold with Crude Oil drifting sideways to slightly higher. The US Dollar Index should continue lower while US Treasuries remain in an uptrend but with a potential reversal looming. The Shanghai Composite could continue its flag or head lower while Emerging Markets continue their flag or head higher. Volatility should remain subdued but begin watching for a break of 21.25 to change that. The Equity Index ETF’s, SPY, IWM and QQQ are all on the same page again and look lower.

The week began with Oil heading up but Gold holding near resistance. The Dollar Index started lower but reversed quickly as Treasuries continued higher. The Shanghai Composite consolidated while Emerging Markets moved lower. Amidst stable volatility the Equity Index ETF’s continued lower. What does this mean for the coming week? Lets look at some charts.

SPY Daily,$SPY

SPY Weekly,$SPY

The SPY had a horrible week only pausing shortly at the 144 day Simple Moving Average Thursday before getting pummeled again Friday. The Relative Strength Index (RSI) is pointing lower still on the daily chart as is the Moving Average Convergence Divergence (MACD) indicator, while the volume has been increasing. The weekly chart shows a break of the downtrend line from the March 2009 lows with a RSI pointing steeply lower and the MACD growing more negative. The volume has been growing on the move lower on the weekly timeframe also. Look for more downside next week with support lower at 127.10 then 126.30 and 123.50. 128 and 129 will offer upside resistance.

Next week sets up as a bizarro week for any macro economic follower. Gold and Oil look set to consolidate or go lower and the US Dollar Index and US Treasuries look to continue higher. Both the Shanghai Composite and Emerging Markets look lower next week. Despite falling equity markets Volatility looks to remain subdued. The US Equity Index ETF’s , SPY, IWM and QQQ all look to have more downside with the weekly charts more ugly than the daily charts. Also all three are moving lower in the same pattern indicating this is a total equity market sell off not sector or capitalization specific. Use this information to understand the major trend and how it may be influenced as you prepare for the coming week ahead. Trade’m well.

As always you can see details of individual charts and more on my StockTwits feed and on chartly.)

Full Version with 20 Charts: Macro Week in Review/Preview June 10, 2011

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