SPY Trends and Influencers April 7, 2012

Last week’s review of the macro market indicators saw heading into the new Quarter many of the influencers were looking better to the downside in the short term. Gold ($GLD) and Crude Oil ($USO) were biased lower within their long term and intermediate term uptrends. The US Dollar Index ($UUP) was also looking lower in the short run within an uptrend while US Treasuries ($TLT) just looked lower. The Shanghai Composite ($SSEC) looked to continue lower with Emerging Markets ($EEM) neutral with a chance to break lower. Volatility ($VIX) looked to continue to be tame and possibly move lower. These influencers gave 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.

The week rolled out with Gold falling and Oil joining it lower later in the week. The US Dollar bucked the technicals and roared higher while Treasuries drove lower before a partial recovery. The Shanghai Composite was closed until Thursday and then bounced as Emerging Markets held in their recent range. Volatility rose but remained well below the first resistance level higher. The Equity Index ETF’s started higher before ending the week heading lower. And the reaction in the futures market to the Non Farm Payrolls data continued that on the holiday Friday. 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 made a new multi-year high and then fell back to test support under the 20 day Simple Moving Average (SMA). The Relative Strength Index (RSI) on the daily chart made a lower low with a Moving Average Convergence Divergence (MACD) indicator that is negative and growing more so. The weekly chart is showing consolidation just below the previous high from 2007 with a RSI that is bullish and a MACD that is positive but fading. Both timeframes favor a pullback or consolidation. The futures market reaction to the news Friday morning, with the stock markets closed, reinforce the case for a pullback. There is support lower at 138.75 and 137.50 followed by 133.20 and 130.20. Resistance higher stands at 142.20 and 143.02. Short Term Pullback in an Uptrend.

Heading into next week many markets look better to the downside. Gold and Crude Oil look to continue their recent trends lower. The US Dollar looks strong and ready to continue higher while Treasuries are better to the upside in the short run in their downtrend. The Shanghai Composite may continue the bounce in the downtrend while Emerging Markets continue to consolidate. The Volatility Index looks ready to finally start the rise off the bottom. These influencers paint as picture that gives a downward bias to the US Equity ETF’s. The chart of the SPY agrees and looks to continue lower while the IWM and QQQ may follow or just consolidate. Use this information as you prepare for the coming week and trade’m well.

Join the Premium Users and you can view the Full Version with 20 detailed charts and analysis: Macro Week in Review/Preview April 6, 2012

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