SPY Trends and Influencers June 29, 2024

Last week, the review of the macro market indicators saw with the June quadruple witching in the books in the books, equity markets looked a bit gassed after a good start. Elsewhere looked for Gold ($GLD) to continue its consolidation in the uptrend while Crude Oil ($USO) moved higher in consolidation. The US Dollar Index ($DXY) continued the short term move to the upside while US Treasuries ($TLT) continued their short term move higher in the secular downtrend. The Shanghai Composite ($ASHR) looked to continue the short term trend lower while Emerging Markets ($EEM) looked to be on the verge of breaking consolidation to the upside.

The Volatility Index ($VXX) looked to remain very low making the path easier for equity markets to the upside. The charts of the $SPY and $QQQ looked strong, especially on the longer timeframe, but with possible reversal or digestion candles ahead. On the shorter timeframe both the QQQ and SPY could use a reset on momentum measures as both were extended and pullbacks were helping there. The $IWM continued to go nowhere moving mainly sideways in the upper part of the 2½ year consolidation.

The week played out with Gold remaining in consolidation, holding in a narrow range over support while Crude Oil consolidated last week’s move higher. The US Dollar continued higher and is approaching the May high while Treasuries saw some midweek weakness and dropped back. The Shanghai Composite found some support as it hit a 4 month low while Emerging Markets have so far failed to produce that upside breakout.

Volatility continued to the 2024 lows after an early week spike. This put initial pressure on equities and they responded with a 2 day move lower to start the week. All found support by Wednesday and reversed with the SPY and QQQ climbing back to retest all-time highs while the IWM moved higher in the long consolidation range. Profit taking then saw the Friday gains evaporate. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week in a two day pullback from the all-time high on the daily chart. It dropped again Monday and then found support moving higher the next 3 days. Friday it opened higher, retesting the all-time high, after a calm Core PCE report on inflation but then fell back all day before a last 20 minute rally that left it nearly flat on the week. The RSI is stalled in the bullish zone but potentially at a lower high, with the MACD crossed down and falling but with lots of room before a turn to bearish.

The weekly chart printed the second highest weekly close on record. This came with the second candle with an upper shadow though. The Bollinger Bands® remain pointing higher with the RSI level in overbought territory and the MACD positive and rising. It looks more bullish on the longer timeframe than the shorter one. There is resistance at 545.75 and 549.50 then the target from the Cup and handle to 560 near the 161.8% extension of the retracement of the 2022 move lower at 562.19. Support lower sits at 542 and 540 then 537 and 533 before 530 and 524.50. Uptrend.

SPY Weekly, $SPY

With the 2nd Quarter of 2024 in the books and heading into the holiday shortened week, equity markets showed resilience with a rebound from a pullback and large caps and tech names holding at the highs. Elsewhere look for Gold to continue its consolidation after the record move higher while Crude Oil consolidates in a broad range. The US Dollar Index continues the short term move to the upside while US Treasuries continue in their secular downtrend. The Shanghai Composite looks to continue the downtrend while Emerging Markets consolidate under long term resistance.

The Volatility Index looks to remain very low and stable making the path easier for equity markets to the upside. Their charts look strong, especially on the longer timeframe. On the shorter timeframe both the QQQ and SPY are showing signs of a possible reset on momentum measures as both are extended. The IWM continues to lag in a long term channel. Use this information as you prepare for the coming week and trad’em well.

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