SPY Trends and Influencers March 2, 2024

Last week, the review of the macro market indicators saw with 1 week left in February, large cap and tech focused equity markets showed resilience with a rebound to new highs after a weak start. Elsewhere looked for Gold ($GLD) to continue in consolidation near the highs while Crude Oil ($USO) consolidated in a broad range. The US Dollar Index ($DXY) now looked to reverse to drift to the downside while US Treasuries ($TLT) pulled back in their downtrend. The Shanghai Composite ($ASHR) looked to continue the reversal higher while Emerging Markets ($EEM) consolidated.

The Volatility Index ($VXX) looked to remain very low making the path easier for equity markets to the upside. Their charts looked strong, especially the $SPY and $QQQ on the longer timeframe. On the shorter timeframe both the QQQ and SPY were setting up for a reset as both had momentum divergences. The $IWM continued to flirt with a break out.

The week played out with Gold holding in consolidation until a strong push to the upside Friday while Crude Oil also held in consolidation under resistance until a break higher Friday. The US Dollar remained in a tight range while Treasuries managed a small move higher. The Shanghai Composite continued higher through resistance while Emerging Markets continued the short term move higher in consolidation.

Volatility fell back to the 2023 support level. This put a spark into equities late in the week. The SPY and QQQ moved up to new all-time highs with the IWM breaking a nearly 2 year range to the upside. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week at an all-time high. It started the week moving lower for 3 days but giving up less than 2 points. Thursday it reversed higher and then Friday moved up to a new all-time high to close out the week. The RSI on the daily chart is strong on the edge of overbought in the bullish zone with the MACD flat and positive. Price continues to follow the Bollinger Bands® higher on this timeframe.

On the weekly chart it has now printed 16 positive weeks out of the last 18. The RSI on this timeframe is rising slowly in overbought territory with the MACD positive and moving up. There is no resistance above 513.25 but the 138.2% extension of the retracement of the 2022 pullback at 530 and the target for the Cup and Handle to 560 above that. Support lower sits at 510 and 503.50 then 501.50 and 498.50 before 495 and 491.50. Uptrend.

SPY Weekly, $SPY

With the month of February in the books, equity markets continue to show strength with the small caps now joining the large cap and tech indexes. Elsewhere look for Gold to continue its assault on a new all-time high while Crude Oil moves higher out of consolidation. The US Dollar Index continues to drift in consolidation while US Treasuries hold in their downtrend. The Shanghai Composite looks to continue the short term move higher while Emerging Markets continue to consolidate.

The Volatility Index looks to remain very low and stable creating an environment for equity markets to move to the upside more easily. Their charts look strong, especially on the longer timeframe with the long win streaks for the SPY and QQQ and now the IWM breaking higher. On the shorter timeframe all looks well to as the QQQ and SPY reset their momentum measures early in the week and the IWM showing strength. 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 March 2, 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
Dragonfly Caps Blog