SPY Trends and Influencers July 9, 2022

• Posted by Greg Harmon
• on July 9th, 2022

Last week’s review of the macro market indicators saw with the 2nd Quarter in the books, equity markets finished the worst start of the year since 1970. They gave back more than half of the previous week’s gain before a decent finish into the long weekend. Elsewhere looked for Gold ($GLD) to continue to consolidate in its pullback while Crude Oil ($USO) continued in a short term pullback. The US Dollar Index ($DXY) continued in an uptrend while US Treasuries ($TLT) were in a short term move higher in their downtrend.

The Shanghai Composite ($ASHR) looked to continue its uptrend while Emerging Markets ($EEM) continued to move lower. The Volatility Index ($VXX) looked to remain elevated but moving lower making the path easier for equity markets to the upside. Their charts still looked weak, especially on the longer timeframe. On the shorter timeframe the $IWM, the $QQQ and the $SPY could make higher lows, the possible start of a short term reversal.

The week played out with Gold dropping back to a nine month low while Crude Oil printed a two month low before a bounce. The US Dollar ripped to a nearly 20 year high while Treasuries ended their move at another lower high and fell back. The Shanghai Composite stalled under the 200 day SMA in its uptrend while Emerging Markets found support at a retest of the May low and bounced.

Volatility dropped all week, ending back near the normal range. This lifted the pressure off of equities and they responded with a weeklong move higher. The SPY, and the IWM could not hold up and finished fractionally lower Friday but the QQQ managed the first 5 day move higher since November 2021. All 3 ended the week back near the end of June bounce levels. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week at the 38.2% retracement of the post pandemic move higher but following a strong Friday pre-holiday finish. It started lower Tuesday but then ran higher all day. That continued through the rest of the week until profit taking late Friday had it finish with a slightly down day. The move left it slightly below the late June bounce high but back over the 20 day SMA. The daily chart shows the Bollinger Bands® are starting to squeeze in with the RSI now up to the midline and the MACD rising but negative.

The weekly chart shows the stickiness of the Fibonacci level. The RSI on this timeframe is holding in bearish territory with the MACD flat at a very deep negative level. There is support at 368 and 382.50 then 380 and 376 before 373 and 369 then 364.50. Resistance higher comes at 389.50 and 394.50 before 397.50 and 400.50 then 403.50. Short term it will take a move over 394.50 to gain interest on the long side with a longer term move over 418 to attract more. Bounce in Downtrend.

SPY Weekly, $SPY

With the first week of the 3rd Quarter in the books, equity markets showed strength with a multi-day move to the upside. Elsewhere look for Gold to continue its pullback while Crude Oil continues its short term drop. The US Dollar Index continues to race to the upside while US Treasuries continue their downtrend. The Shanghai Composite looks to pause in its uptrend while Emerging Markets continue to trend lower.

The Volatility Index looks to remain slightly elevated but moving lower making the path easier for equity markets to the upside. Their charts look promising but not yet trustworthy on the shorter timeframe. On the longer timeframe the IWM, the QQQ and the SPY all remain in consolidation at key retracement levels. 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 July 8, 2022  

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