SPY Trends and Influencers April 1, 2023

Two weeks ago, the review of the macro market indicators saw with the March Quad Witching in the books, equity markets showed mixed results in a volatile week. Elsewhere looked for Gold ($GLD) to continue its uptrend while Crude Oil ($USO) moved lower. The US Dollar Index ($DXY) continued to trend lower while US Treasuries ($TLT) held in broad consolidation. The Shanghai Composite ($ASHR) looked to consolidate while Emerging Markets ($EEM) moved to the downside.

The Volatility Index ($VXX) looked to remain elevated making the path harder for equity markets to the upside. Their charts were mixed on the shorter timeframe with the $QQQ showing strength while the $SPY remained in a pullback and the $IWM was trending lower. On the longer timeframe both the QQQ and SPY remained in a short term uptrends with the QQQ leading, while the IWM was in a sideways broad consolidation.

This week played out with Gold building a tightening consolidation under 2000 while Crude Oil drives higher toward a retest of the breakdown. The US Dollar dropped back near a 2 month low while Treasuries held in the top half of the consolidation range. The Shanghai Composite held over support while Emerging Markets reversed and are near a test of resistance.

Volatility settled down, falling back to the lows of the beginning of the month. This released the pressure on equities and they responded by moving higher. The SPY and QQQ set in another higher low with the QQQ going on to also maker a higher high. The IWM made a lower low intraday before its move back higher, the weakest of the 3 Index ETFs. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week grinding higher off a higher low. It moved up over the 20 day SMA on the daily chart Monday and then settled back Tuesday. It then gapped higher Wednesday and continued to move up the rest of the week to end the Quarter at a 6 week high. The Bollinger Bands® are open to the upside and price is riding them higher. The RSI crossed into the bullish zone with the MACD crossing up to positive. A move over 417.50 would reconfirm the uptrend since the October low.

The weekly chart shows a strong candle higher with a move over 50 week SMA. The RSI is rising off the midline with the MACD positive and rising. There is resistance at 411 and 413.50 then 417.50 and 420 before 423 and 425.50 then 428.50. Support lower comes at 407.50 and 405.50 then 403.50 and 400.50 before 397.50 and 394.50 then 391. Uptrend.

SPY Weekly, $SPY

With the first Quarter of 2023 in the books, equity markets showed strength as they closed out with a strong move to the upside. Elsewhere look for Gold to continue its consolidation in the uptrend while Crude Oil continues a short term move higher. The US Dollar Index continues to move to the downside while US Treasuries consolidate after the long move lower. The Shanghai Composite looks to continue in consolidation while Emerging Markets join in with their own consolidation.

The Volatility Index looks to remain in the normal range and stable making the path easier for equity markets to the upside. Their charts are mixed, with the SPY and QQQ looking strong on both the short and long timeframe. The IWM however remains in consolidation. Use this information as you prepare for the coming week and trad’em well.

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