SPY Trends and Influencers December 26, 2020

Last week’s review of the macro market indicators saw with December Options Expiration in the books, and heading into the short Christmas week, equity markets looked ready to end the year strong. Elsewhere looked for Gold ($GLD) to continue its short term uptrend while Crude Oil ($USL) ramped up its move higher. The US Dollar Index ($DXY) continued to sink while US Treasuries ($TLT) pulled back but in a broad range.

The Shanghai Composite ($ASHR) looked to continue in broad consolidation over support while Emerging Markets ($EEM) continued in an uptrend. The Volatility Index ($VXX) looked to remain low and drifting lower making the path easier for equity markets to the upside. Their charts also looked strong, especially on the longer timeframe. On the shorter timeframe the $IWM was the strongest heading higher without pause. The $SPY and $QQQ were flashing reversal signals, so they might be in for some short term digestion.

The week played out with Gold pushing to the upside but quickly meeting resistance and dropping back to end the week lower while Crude Oil consolidated at a higher range. The US Dollar found support and staged a short-lived bounce while Treasuries moved slightly lower. The Shanghai Composite peaked and pulled back from a lower high while Emerging Markets pulled back to support.

Volatility spiked up Monday but could not even hold the full day and then drifted lower to end the week little changed. This put initial pressure on equities and they moved lower early Monday. All quickly found support and reversed to finish the day little changed. The SPY and QQQ then consolidated the rest of the week with the IWM continuing its move higher. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week pulling back from a new all-time high. It dropped back again Monday before an intraday recovery. Then held in a tight range, drifting higher the rest of the week. It finished the week slightly lower than it started and over the 20 day SMA. The daily chart shows the Bollinger Bands® squeezing in. The RSI is turning back up in the bullish zone with the MACD slowly resetting lower but positive.

The weekly chart looks of consolidation. A third week of a small range after a move higher out of the broad range. The RSI is flat in the bullish zone with the MACD and the Bollinger Bands rising. There is resistance at 372.50 above. Support lower comes at 364.50 and 360 then 358 and 356 before 353. Consolidation in Uptrend.

SPY Weekly, $SPY

With just 4 trading days left in 2020, equity markets remain strong. Elsewhere look for Gold to continue its short term uptrend while Crude Oil works slowly higher. The US Dollar Index continues to look better to the downside while US Treasuries pullback in their downtrend. The Shanghai Composite looks to consolidate in a broad range over long term support while Emerging Markets trend higher.

The Volatility Index looks to drop slowly making the path easier for equity markets to the upside. Their charts look strong, especially on the longer timeframe, with the IWM and QQQ marching higher and the SPY in consolidation. On the shorter timeframe both the QQQ and SPY are resetting momentum measures with the IWM driving higher. Use this information as you prepare for the coming week and trad’em well.

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 December 24, 2020  

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