SPY Trends and Influencers December 16, 2023

Last week, the review of the macro market indicators saw with just 3 weeks left in the year, equity markets continued to show strength with large cap and tech indexes approaching all-time highs. Elsewhere looked for Gold ($GLD) to continue its uptrend while Crude Oil ($USO) continued to drop. The US Dollar Index ($DXY) continued to bounce in the downtrend while US Treasuries ($TLT) did the same. The Shanghai Composite ($ASHR) looked to continue the downtrend while Emerging Markets ($EEM) dropped in broad consolidation.

The Volatility Index ($VXX) looked to remain very low and stable creating a positive environment for equity markets to move to the upside. Their charts looked strong, especially on the longer timeframe. On the shorter timeframe both the $QQQ and $SPY looked to continue to drift higher. The $IWM had taken the lead in the short term.

The week played out with Gold finding support and reversing to the upside while Crude Oil broke below $70/bbl before finding support and reversing. The US Dollar met resistance and fell back while Treasuries continued their move to the upside. The Shanghai Composite found support at a retest of the October low while Emerging Markets reversed and made a 4 month high.

Volatility continued little changed, holding just above the 2019 support level. This continued the breeze at the backs of equities and they marched higher all week. This resulted in the QQQ closing at a new all-time high and the SPY only 5 points away from a record with the IWM reaching the top of a 2 year channel. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week retesting the July high. It pushed through that Monday and continued to move higher through Thursday, closing at a nearly 24 month high and just off the all-time high. It printed an Evening Star reversal pattern though and confirmed with a move lower on the daily chart Friday. This saw the RSI rising into overbought territory and end the week pulling back with the MACD turning to flat near where prior peaks have occurred.

The weekly chart shows the longer term Cup and Handle pattern finally with a definitive trigger. It has a target to 570. The Bollinger Bands® on this timeframe are open higher with the RSI rising in the bullish zone and the MACD positive and climbing. There is resistance at 470 and 471 then 473 and 478.50. Support lower comes at 466 and 463.50 then 460 and 457 before 454 and 451. Uptrend.

SPY Weekly, $SPY

With the December FOMC meeting and Quadruple Witching in the books, equity markets posted another stellar week as they head into the last full week of the year. Elsewhere look for Gold to continue higher while Crude Oil continues to trend lower. The US Dollar Index continues to drift to the downside while US Treasuries continue in their short term uptrend. The Shanghai Composite looks to continue the trend lower while Emerging Markets possibly break resistance to the upside.

The Volatility Index looks to remain very low and stable making the path easier for equity markets to the upside. Their charts look strong, especially the SPY and QQQ on the longer timeframe. On the shorter timeframe the IWM, QQQ and SPY could use a reset on momentum measures as all are extended. 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 December 15, 2023

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