SPY Trends and Influencers March 26, 2022

Last week’s review of the macro market indicators saw with the first Fed tightening and March Quadruple Witching behind, equity markets showed renewed strength. Elsewhere looked for Gold and Crude Oil to pause in their uptrends. The US Dollar Index also looked to consolidate the recent gains while US Treasuries continued the downtrend. The Shanghai Composite looked to continue the trend lower along with Emerging Markets, although the latter might be ready for a reversal.

The Volatility Index looked to be easing from elevated levels making the path easier for equity markets to the upside. Their charts looked strong on the longer timeframe. On the shorter timeframe both the QQQ and SPY were showing real promise as they finished at higher highs for the first time in 2022. The IWM also showed some promise as it tested resistance at the long term range.

The week played out with Gold pushing to the upside late in the week while Crude Oil also continued the uptrend. The US Dollar continued in a narrow range while Treasuries continued to move lower. The Shanghai Composite bounce stalled and reversed lower while Emerging Markets held in their bounce.

Volatility leaked lower all week, ending near the February lows. This removed some pressure on equities and they responded with some choppy moves higher. This resulted in the SPY and QQQ moving to new highs for the month before some selling Friday. The IWM stalled as it hit the long term prior channel, now as resistance. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week making a slightly higher high, the first in 2022 and back over the 50 and 200 day SMA’s. It had a doji day Monday and then started higher Tuesday. Wednesday it retrenched and then moved up to close the week at a new high Friday. Price is riding the Bollinger Bands® higher on the daily chart. It also shows a RSI moving into the bullish zone with the MACD rising and positive.

The weekly chart shows follow through to the upside over the 50 week SMA. The RSI on this timeframe is rising through the midline with the MACD rising toward a cross up and move to positive. There is resistance at 454 and 457 then 460 and 463.50 before 466 then 470. Support lower comes at 450 and 447 then 444 and 441 before 437.50 and 435.50. Short Term Uptrend.

SPY Weekly, $SPY

Heading into the last week of the 1st Quarter, equity markets showed some strength in the face of increasing expectations for Fed moves and aggressiveness as well as continued war in Ukraine. Elsewhere look for Gold to continue its move higher while Crude Oil also rebounds to the upside. The US Dollar Index continues to drift to the upside while US Treasuries pullback in their downtrend. The Shanghai Composite looks to continue the short term move lower while Emerging Markets may resume the downtrend.

The Volatility Index has made a return to normal levels making the path easier for equity markets to the upside. The charts of the SPY and QQQ look strong, especially on the longer timeframe. On the shorter timeframe both are close to confirming reversals to the upside. The IWM remains in its old pattern of consolidation, just in a lower range. Use this information as you prepare for the coming week and trad’em well.

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