SPY Trends and Influencers May 11, 2024

• Posted by Greg Harmon
• on May 11th, 2024

Last week, the review of the macro market indicators saw with April and the May FOMC meeting in the books, equity markets showed some strength moving higher in a busy week for news. Elsewhere looked for Gold ($GLD) to pullback in its uptrend while Crude Oil ($USO) pulled back in the long uptrend as well. The US Dollar Index ($DXY) was on the edge of a break out to the upside while US Treasuries ($TLT) paused in their downtrend. The Shanghai Composite ($ASHR) looked to continue the short term move higher as it returned from a Labor Day holiday while Emerging Markets ($EEM) with further upside would confirm a new uptrend.

The Volatility Index ($VXX) looked to remain very low making the path easier for equity markets to the upside. Their charts looked strong on the longer timeframe. On the shorter timeframe the $IWM was leading the way to a reversal higher while both the $QQQ and $SPY still had some work to do before they were in the clear.

The week played out with Gold consolidating over 2300 until a move higher Friday while Crude Oil consolidated at resistance and support. The US Dollar dropped into a lower consolidation while Treasuries made another lower high. The Shanghai Composite gapped higher Monday and then held in consolidation all week while Emerging Markets made another higher high in their uptrend.

Volatility continued lower all week putting a tailwind at the backs of the equity indexes. They all ran higher Monday and Tuesday and then the SPY and QQQ took a day of rest with the IWM retreating. The SPY and IWM moved higher again Thursday with the SPY holding the move Friday after giving back intraday gains while the IWM fell back and the QQQ held in sideways motion. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week pushing higher and attempting to clear consolidation and the 50 day SMA on the daily chart. It gapped up Monday and then stalled for 2 days before another move higher had it end only 2 points off the all-time high close. The Bollinger Bands® are open higher supporting move upside. The RSI is back in the bullish zone and rising with the MACD positive and moving higher.

The weekly chart shows a strong move higher just short of a higher high. The RSI is rising and bullish with the MACD level and positive after a reset lower. There is resistance at 524.50 and the 138.2% extension of the retracement of the 2022 pullback at 530 then the Cup and Handle target to 560. Support lower is at 520.50 and 517.50 then 513.50 and 510 before 503.50 and 501.50 then 498.50. Consolidation in Uptrend.

SPY Weekly, $SPY

Heading into the May options expiration, equity markets showed renewed strength with a rebound from pullback. Elsewhere look for Gold to continue pause in its uptrend while Crude Oil consolidates in the pullback. The US Dollar Index continues to pullback in the 6 month uptrend while US Treasuries continue their downtrend. The Shanghai Composite looks to continue the short term move higher while Emerging Markets flirt with a break out of a long channel to the upside.

The Volatility Index looks to remain very low and stable 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 the QQQ and SPY continue to move higher toward new highs as well. The IWM looks good on the shorter timeframe but the longer timeframe continues to need more time. Use this information as you prepare for the coming week and trad’em well.

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