SPY Trends and Influencers December 21, 2024

• Posted by Greg Harmon
• on December 21st, 2024

Last week, the review of the macro market indicators saw with just 10 trading days left in the year, equity markets continued to show strength on the large cap and tech front, with some weakness appearing in small caps. Elsewhere looked for Gold ($GLD) to continue its consolidation in the uptrend while Crude Oil ($USO) consolidated in the lower end of a broad range. The US Dollar Index ($DXY) continued the short term move to the upside while US Treasuries ($TLT) held in consolidation. The Shanghai Composite ($ASHR) looked to consolidate in the uptrend while Emerging Markets ($EEM) continued the short term move higher.

The Volatility Index ($VXX) looked to remain very low and stable making the path easier for equity markets to the upside. Their charts looked strong, especially on the longer timeframe, with the small cap $IWM showing some downside risk. On the shorter timeframe the $QQQ had been the short term leader and looked to continue while the $SPY consolidated at the high and the IWM pullback looked to deepen.

The week played out with Gold pulling back to a 1 month low before a bounce while Crude Oil fell back in consolidation. The US Dollar continued to move up reaching a new 25 month high while Treasuries fell back to test the April lows. The Shanghai Composite fell back in consolidation while Emerging Markets fell back to the September lows, threatening the short term move higher.

Volatility spiked after the FOMC meeting then settled back to the low 20’s. This was accompanied by equities dropping dramatically Wednesday and holding at the lows. This resulted in the SPY falling back into the post-election gap. The QQQ fell to near the 50 day SMA and the IWM filling the post-election gapand continuing back into the recent consolidation area. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week in consolidation on the daily chart in the uptrend. It held there through Tuesday. Wednesday saw a sharp move lower following the FOMC statement and it continued lower as Chairman Powell spoke in the press conference, eventually closing down almost 3% on the day. It held there Thursday and then printed an outside bullish candle to end the week Friday.

This is a potential reversal candle if confirmed Monday. The move down Wednesday was on the strongest volume since the August low and activity has started to drop back since. The RSI is curling up after hitting the bottom of the bullish range while the MACD is falling but positive.

The weekly chart shows the damage as price did not even hit the 20 week SMA before bouncing. The RSI is holding in the bullish zone with the MACD looking to cross down. There is definitely more downside room before any worry sets in. There is support at 590 and 585 then 580 and 574.50 before 571.50. Resistance above 593 is at 600 and 604 then 609. Pullback in Uptrend.

SPY Weekly, $SPY

With just 5½ trading days left in 2024, the week showed a crack in equity markets following the FOMC December meeting. Elsewhere look for Gold to continue to consolidate the major move higher while Crude Oil consolidates in the lower end of a broad range. The US Dollar Index continues to drift to the upside while US Treasuries pullback in consolidation. The Shanghai Composite looks to consolidate in its uptrend while Emerging Markets may be reversing their uptrend.

The Volatility Index looks to remain low after spiking and pulling back making the path easier for equity markets to the upside. The charts of the SPY and QQQ continue to look strong on the longer timeframe. On the shorter timeframe both look a little weaker. The IWM is now weak enough that it is threatening the uptrend. 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, 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