SPY Trends and Influencers April 13, 2024

Last week, the review of the macro market indicators saw with the first week of April in the books, equity markets looked in need of a rest. Elsewhere looked for Gold ($GLD) to continue its record run higher while Crude Oil ($USO) continued its move to the upside as well. The US Dollar Index ($DXY) continued to short term trend to the upside while US Treasuries ($TLT) might resume their downtrend. The Shanghai Composite ($ASHR) looked to continue the short term move higher while Emerging Markets ($EEM) consolidated under long term resistance.

The Volatility Index ($VXX) looked to remain low making the path easier for equity markets to the upside. Their charts also looked strong, especially on the longer timeframe. On the shorter timeframe the $QQQ was at risk for some downside with the $IWM in a messy short term uptrend and the $SPY the strongest but also seeing some profit taking show up.

The week played out with Gold continuing it run of record highs while Crude Oil met resistance and consolidated at 5½ month highs. The US Dollar found strength and pushed to 5½ month highs as well while Treasuries made new 4 month lows before a bounce Friday. The Shanghai Composite pulled back from a lower high while Emerging Markets broke down out of the rising short term channel.

Volatility rose up from a short term consolidation to the top of a rising wedge. This put pressure on equities late in the week and they responded by moving lower. This resulted in the IWM back at support which was prior resistance for 2 years, the QQQ continuing sideways in consolidation near the highs and the SPY touching a 1 month low. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week holding at the 20 day SMA on the daily chart after a pullback from the top. It held there Monday and Tuesday and then dropped below Wednesday in a reaction to the hotter than expected CPI print. Thursday saw it rise to retest the 20 day SMA and then fall back Friday to touch the 50 day SMA for the first time since the beginning of November. Price ended at the lower of the Bollinger Bands® with the RSI heading toward the bottom of the bullish zone and the MACD positive but dropping and approaching zero.

The weekly chart shows a second week headed lower, this one with a longer red candle. The RSI on this timeframe has dropped out of overbought territory with the MACD about to cross down. There is support lower at 510 and 503.50 then 501.50 and 498.50 before 495 and 491.50 with the retest of the Cup and Handle breakout at 476.75 lower. Resistance above is at 513.50 and 517.50 then 520.50 and 524.50. The 138.2% extension of the retracement of the 2022 pullback is above at 530 and then the Cup and Handle target at 560. Pullback in Uptrend.

SPY Weekly, $SPY

Heading into the April options expiration, equity markets showed some cracks in the uptrends. Elsewhere look for Gold to continue its uptrend, but with perhaps a short term pause while Crude Oil consolidates the move higher. The US Dollar Index looks to break to the upside while US Treasuries resume their downtrend. The Shanghai Composite looks to consolidate in its move higher while Emerging Markets consolidate in a broad channel.

The Volatility Index looks to continue to slow move higher keeping pressure on equity markets. The QQQ looks the strongest, especially on the longer timeframe as it consolidates while the SPY digests its strong move with a pullback. The IWM seems to have given up any chance of breaking out of the long consolidation as it falls back into the channel. Use this information as you prepare for the coming week and trad’em well.

Join the Premium Users and you can view the Full Version with 20 detailed charts and analysis: Macro Week in Review/Preview April 12, 2024

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

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.

blog comments powered by Disqus
Dragonfly Caps Blog