SPY Trends and Influencers April 1, 2012

Last week’s review of the macro market indicators saw as the last week of the first quarter of 2012 came around with Gold ($GLD) going back to its old confusion, looking sideways in the intermediate term downtrend in the long term uptrend while Crude Oil ($USO) consolidated in the 104.81-110 range with a bias higher. Both the US Dollar Index ($UUP) and US Treasuries ($TLT) were biased to the downside in the intermediate term but Treasuries might continue to rally short term. The Shanghai Composite ($SSEC) looked to continue lower while Emerging Markets ($EEM) were at support and losing that would follow lower. The Volatility Index ($VIX) still had a harder road to move in the bias direction lower but showed no signs of rising anytime soon. These influencers created a backdrop for the US Equity Index ETF’s $SPY, $IWM and $QQQ to continue to consolidate with in their bullish trends. Their charts tended to agree but for the week the SPY and QQQ showed signs that the pullback might continue.

The week began with Gold bouncing but staying in the recent range under 1700 moving mainly sideways while Crude Oil fell out of the range lower. The US Dollar moved lower and then consolidated while Treasuries continued to drift higher. The Shanghai Composite fell hard while Emerging Markets drifted lower to end the week. Volatility rose slightly but remained in its low range. The Equity Index ETF’s all gapped higher Monday only to fill those gap by Thursday with the exception of the ever-strong QQQ. What does this mean for the coming week? Lets look at some charts.

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

SPY Daily, $SPY

SPY Weekly, $SPY

The SPY gapped higher Monday only to fill the gap by Thursday with a hollow red candle and then continued higher Friday. The Relative Strength Index (RSI) remains bullish and is turning back higher with a Moving Average Convergence Divergence (MACD) indicator that is near flat lined on the daily chart. A bit of an upward bias on this timeframe. The 20 day Simple Moving Average (SMA) continues to be support. The weekly chart continues to climb the Fibonacci Fan line toward the 2007 high. The RSI on this time frame is bullish and rising with a MACD that is positive but stalling. There is resistance higher at 141.83 and 143.02 before a target of 161.97 as a Fibonacci extension. Support lower comes at 139 and 137.40. Continued Uptrend with a Possible Move to Neutral.

Heading into the new Quarter many of the influencers are looking better to the downside in the short term. Gold and Crude oil are biased lower with in their long term and intermediate term uptrends. The US Dollar Index is also looking lower in the short run within an uptrend while US Treasuries just look lower. The Shanghai Composite looks to continue lower with Emerging Markets neutral with a chance to break lower. Volatility looks to continue to be tame and possibly move lower. These influencers give a backdrop for the US Equity Indexes SPY, IWM, QQQ, to continue higher and their charts agree but not so strongly in the short run. The QQQ continues to look the best with the SPY next, looking better higher with a chance of consolidation while the IWM continues to move sideways. Use this information as you prepare for the coming week and trade’m well.

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