SPY Trends and Influencers March 30, 2024

Last week, the review of the macro market indicators saw with the March FOMC meeting in the books, equity markets showed strength moving higher despite the continued tone of rates staying higher for longer. Elsewhere looked for Gold ($GLD) to continue its consolidation in a bull flag at the highs while Crude Oil ($USO) continued the messy uptrend. The US Dollar Index ($DXY) looked to drift to the upside in consolidation while US Treasuries ($TLT) consolidated in their downtrend. The Shanghai Composite ($ASHR) looked to continue the short term uptrend while Emerging Markets ($EEM) consolidated in a broad range.

The Volatility Index ($VXX) looked to remain very low and stable making the path easier for equity markets to the upside. Their charts looked strong, especially on the longer timeframe with the $SPY at a weekly high and the $IWM and $QQQ consolidating the recent moves higher. On the shorter timeframe both the QQQ and SPY also looked strong making fresh all-time highs Thursday before dropping toward filling gaps Friday on profit taking. The IWM looked to have established a higher range.

The week played out with Gold breaking consolidation and moving to a new all-time high while Crude Oil also rounded up to a new 5 month high. The US Dollar drifted slightly higher while Treasuries moved higher in a tightening consolidation. The Shanghai Composite pulled back, ending the uptrend while Emerging Markets held in a tight range.

Volatility rose early in the week but fell back quickly and ended the week little changes at very low levels. This put initial pressure on equities and they fell to start the week. The damage was short lived and minimal though with the SPY and QQQ building short bull flags and the IWM slightly deeper. The SPY and IWM broke to the upside Thursday making new highs with the QQQ lagging and holding in consolidation. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week after seeing profit taking following a new all-time high on Thursday. It continued lower Monday and Tuesday but then reversed Wednesday to set a new all-time high. Thursday it gave back marginally and closed the week positive. The daily chart shows price has but broken below the 20 day SMA since January 17th in the rising Bollinger Bands®. The RSI is strong in the bullish zone with the MACD flat and positive.

The weekly chart shows a second week high after the brief 2 week consolidation. The Bollinger Bands on this timeframe also continue to point higher. The RSI is strong in overbought territory in the bullish zone with the MACD positive and rising. There is resistance higher at 524.50 and then the 138.2% extension of the retracement of the 2022 pullback at 530 and the target on the Cup and Handle at 560. Support lower sits at 520.50 and 517.50 then 513.50 and 510 before 503.50 and 501.50. Uptrend.

SPY Weekly, $SPY

With the First Quarter of the year in the books, equity markets have exhibited strength. Elsewhere look for Gold to continue its uptrend while Crude Oil builds on its move higher. The US Dollar Index continues to drift to the upside in consolidation while US Treasuries consolidate in their downtrend. The Shanghai Composite looks to reverse the short term uptrend while Emerging Markets consolidate in a broad range.

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 the SPY on both timeframes. The QQQ is showing some momentum divergence that could lead to more consolidation or a pullback while the IWM looks top step up as it breaks to 2 year highs. Use this information as you prepare for the coming week and trad’em well.

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