SPY Trends and Influencers January 4, 2025

Last week, the review of the macro market indicators saw with just 2 trading days left in 2024, the week showed some disappointment in equity markets following a strong rebound early. Elsewhere looked for Gold ($GLD) to continue to consolidate the major move higher while Crude Oil ($USO) consolidated in the lower end of a broad range. The US Dollar Index ($DXY) continued to hold at resistance while US Treasuries ($TLT) pulled back in consolidation. The Shanghai Composite ($ASHR) looked to consolidate in its uptrend while Emerging Markets ($EEM) might reverse their uptrend.

The Volatility Index ($VXX) looked to remain low making the path easier for equity markets to the upside. The charts of the $SPY and $QQQ continued to look strong on the longer timeframe. On the shorter timeframe both looked a little weaker. The $IWM was now weak enough that it was threatening its uptrend.

The week played out with Gold moving higher in consolidation while Crude Oil moved up to the middle of the consolidation range. The US Dollar rose to a new 27 month high while Treasuries held at 15 month lows. The Shanghai Composite sank to a long term support zone while Emerging Markets continued their short term falling channel.

Volatility rolled over in its bounce giving some life to equities late in the week. This resulted in the SPY, the QQQ and the IWM all rising to end the week little changed from the prior week. 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 lower high in a bounce on the daily chart. It found support and held through Thursday before rising Friday. It remains below the 50 day SMA. The RSI is rising after retesting the December low while the MACD is falling and negative.

The weekly chart shows a touch at the 20 week SMA and rebound. The RSI is rolling lower in the bullish zone with the MACD crossed down and positive. There is support at 590 and 585 then 580 and 574.50 before 571.50 and 565.50. Resistance above is at 593 then 600 and 604 before 609. Pullback in Uptrend.

SPY Weekly, $SPY

Ringing in the New Year and ringing out a fabulous 2024, the week showed some disappointment in equity markets end in an early year rebound. Elsewhere look for Gold to continue to consolidate the major move higher while Crude Oil rises in consolidation in the lower end of a broad range. The US Dollar Index looks to continue the breakout higher while US Treasuries consolidate at 14 month lows. The Shanghai Composite looks to reverse its uptrend with a break lower while Emerging Markets are reversing their uptrend.

The Volatility Index looks to remain low 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 but finding support. The IWM is now recovering and so far, maintaining the uptrend. Use this information as you prepare for the coming week and trad’em well.

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