SPY Trends and Influencers March 9, 2024

Last week, the review of the macro market indicators saw with the month of February in the books, equity markets continued to show strength with the small caps now joining the large cap and tech indexes. Elsewhere looked for Gold ($GLD) to continue its assault on a new all-time high while Crude Oil ($USO) moved higher out of consolidation. The US Dollar Index ($DXY) continued to drift in consolidation while US Treasuries ($TLT) held in their downtrend. The Shanghai Composite ($ASHR) looked to continue the short term move higher while Emerging Markets ($EEM) continued to consolidate.

The Volatility Index ($VXX) looked to remain very low and stable creating an environment for equity markets to move to the upside more easily. Their charts looked 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 looked well too as the QQQ and SPY reset their momentum measures early in the week and the IWM was showing strength.

The week played out with Gold breaking to a new all-time high Monday and following up with new highs every day of the week while Crude Oil consolidated in a higher range. The US Dollar found some weakness and fell lower while Treasuries moved slightly higher. The Shanghai Composite met resistance and held until moving through and higher Friday while Emerging Markets moved up to 7 month highs.

Volatility rose from the bottom made last Friday but remained very low. This put initial pressure on equities and they gave back some of their gains at the start of the week with a 2 day move lower. All found support and started back higher Wednesday. This resulted in the SPY and QQQ printing new all-time highs with the IWM continuing its break higher. 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 held there on Monday and then dropped back on Tuesday, opening a gap on the daily chart. It closed that gap with a move higher Wednesday and Thursday to make a new all-time high. Friday saw the price move higher again but start lower shortly after the open to finish the week nearly unchanged. The RSI is on the edge of overbought territory but flat with the MACD flat and positive.

The weekly chart shows a long legged doji, signaling indecision. This down week makes the string of 16 of the last 19 weeks moving higher. The RSI on this timeframe is into overbought territory but flat with the MACD rising and positive. There is resistance higher at 513.50 and 516, then there is the 138.2% retracement of the 2022 drop at 530 followed by the target on the large Cup and Handle to 560. Support lower sits at 510 and 503.50 then 501.50 and 498.50 before 495 and 491.50. Uptrend.

SPY Weekly, $SPY

Heading into the March options expiration week, equity markets showed some fatigue. Elsewhere look for Gold to continue its uptrend while Crude Oil consolidates in a tighter range. The US Dollar Index looks better to the downside while US Treasuries bounce in their downtrend. The Shanghai Composite looks to continue the short term move higher while Emerging Markets move up in consolidation.

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, but with some indecision candles this week. On the shorter timeframe the IWM, the QQQ and the SPY all ended with some short term weakness. This could signal a correction through price or time. Use this information as you prepare for the coming week and trad’em well.

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