SPY Trends and Influencers April 5, 2025

• Posted by Greg Harmon
• on April 5th, 2025

Last week, the review of the macro market indicators saw with just one trading day left in the 1st Quarter of 2025, equity markets showed renewed weakness after a positive start to the week. Elsewhere looked for Gold ($GLD) to continue its record breaking drive higher and Crude Oil ($USO) to rise in consolidation. The US Dollar Index ($DXY) looked to continue to drift to the downside while US Treasuries ($TLT) pulled back in their consolidation. The Shanghai Composite ($ASHR) looked to consolidate in the short term uptrend while Emerging Markets ($EEM) continued a short term consolidation.

The Volatility Index ($VXX) looked to remain slightly elevated making the path easier for equity markets to the downside. Their charts looked vulnerable on both timeframes. On the shorter timeframe the $SPY seemed a bit stronger than the $QQQ and $IWM. On the longer timeframe all looked set up for more downside.

The week played out with Gold reaching a new high Monday before a stall and profit taking while Crude Oil broke the 4 year range to the downside. The US Dollar fell back to a 6 month low before finding some support while Treasuries rose to a 4 month high. The Shanghai Composite continued to drift lower in consolidation while Emerging Markets fell back to the January low.

Volatility spiked up to retest the August 2024 high. This destroyed equities the second half of the week as they fell back to the lows of last August. This resulted in the SPY, the QQQ and the IWM having their worst week since the 2020 Covid low. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week breaking lower from a bear flag after pulling back from an all-time high. It held there through Wednesday, just under the falling 20 day SMA, and then gapped down Thursday. Another big gap down Friday followed and it ran to touch the full retracement of move up from the August 2024 low. This low was also the target move out of the bear flag. The gaps Thursday and Friday on very large volume could be a sign of exhaustion, for now, with price well outside of the Bollinger Bands®. The RSI is into oversold territory with the MACD negative and falling.

The weekly chart shows a long red candle, the worst week since March 2020, dropping through the 100 week SMA and finishing well outside of the Bollinger Bands. The RSI is dipping into oversold territory with the MACD negative and falling. There is support lower at 503.50 and 501.50 then 498.50 and 495 before 491.50 and 488 followed by 478 and 473.50. Resistance higher is at 510 and 513.50 then 517.50 and 520.50 before 524.50 and 530 followed by 534 and 537. Short Term Downtrend.

SPY Weekly, $SPY

With the release of the first round of tariffs since 1930, equity markets reacted with their worst week (2 days) since March of 2020. Elsewhere look for Gold to continue to hold over $3000/oz while Crude Oil collapses into a downtrend. The US Dollar Index continues to drift to the downside in consolidation while US Treasuries continue in consolidation. The Shanghai Composite looks to continue to consolidate the short term move higher while Emerging Markets may be entering a new downtrend.

The Volatility Index looks to remain very high making the path easier for equity markets to the downside. Their charts look weak on both timeframes. On the shorter timeframe the gaps the last 2 days may signal short term exhaustion. On the longer timeframe the SPY, the IWM and the QQQ are all in short term downtrends. Use this information as you prepare for the coming week and trad’em well.

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