SPY Trends and Influencers December 21, 2019

• Posted by Greg Harmon
• on December 21st, 2019

Last week’s review of the macro market indicators saw with one full week before the holiday week and options expiration coming, equity markets were running higher on all cylinders. Elsewhere looked for Gold($GLD) to consolidate in a bull flag while Crude Oil ($USO) moved up in broad consolidation. The US Dollar Index ($DXY) looked to move lower in the short term while US Treasuries ($TLT) paused in their pullback.

The Shanghai Composite ($ASHR) looked to continue higher while Emerging Markets ($EEM) rose in consolidation.  Volatility ($VXXB) looked to remain very low, keeping the bias for the equity markets to the upside. Equities were following higher with that weight off of them. The $SPY and $QQQ, at all-time highs, looked to continue higher. The $IWM also looked good for more upside as it broke a 14 month range.

The week played out with Gold running sideways in consolidation while Crude Oil drove higher all week until giving up nearly the full gain Friday. The US Dollar found support and bounced while Treasuries drove lower all week. The Shanghai Composite pierced resistance and then consolidated while Emerging Markets gapped down to open the week but reversed to end nearly unchanged Friday.

Volatility stuck to the lows, staying below the teens all week. This made for a positive environment for equities and they responded by starting the week with a move higher. The SPY and QQQ then held in place until Thursday when they started higher again and ended at all-time highs. The IWM continued to move higher all week after Monday. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week at all-time highs after moving above the late November high. It opened Monday with a gap up to another new high and then held there through Thursday. That is when it broke the range to the upside. It went ex-dividend Friday but still managed to press back to the highs on the week. The daily chart shows the RSI moving into overbought territory, but not extreme, with the MACD rising and positive. The Bollinger Bands® continue to open higher.

The weekly chart shows another strong week to the upside. The RSI on this timeframe is rising into overbought territory with the MACD rising. The target on the break of the ascending triangle at 330 is closing in, with the target to 350 above that. There is no resistance above. Support lower comes at 320 and 319 then 315.50 and 313.50 before 310. Uptrend.

SPY Weekly, $SPY

Heading into the shortened Christmas week, equity markets look very strong although the larger cap indexes are starting to get a bit extended. Elsewhere look for Gold to consolidate under 1500 while Crude Oil digests in the uptrend. The US Dollar Index looks to continue to the upside in broad consolidation while US Treasuries continue their pullback. The Shanghai Composite looks to consolidate the recent move higher in a short term uptrend while Emerging Markets move higher around long term resistance.

The Volatility Index looks to remain very low making the path easier for equity markets to the upside. Their charts also look strong, especially on the longer timeframe. On the shorter timeframe both the QQQ and SPY could us a reset on momentum measures as both are extended. If that happens it might be time for the IWM to take the lead. 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 20, 2019.  

If you like what you see sign up for more ideas and deeper analysis using the Get Premium button above.   And until year end, special Holiday pricing of only $618. After the Holidays it jumps to $1000.

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