SPY Trends and Influencers May 13, 2023

Last week, the review of the macro market indicators saw with the May FOMC meeting in the books, equity markets showed resilience with a rebound Friday erasing an ugly midweek slump. Elsewhere looked for Gold ($GLD) to continue its uptrend while Crude Oil ($USO) held in the low end of a consolidation range. The US Dollar Index ($DXY) continued to drift sideways at support while US Treasuries ($TLT) consolidated in their downtrend. The Shanghai Composite ($ASHR) looked to continue higher in consolidation while Emerging Markets ($EEM) consolidated.

The Volatility Index ($VXX) looked to remain very low and stable making the path easier for equity markets to the upside. The charts of the $QQQ and $SPY looked strong on the longer timeframe with the $IWM in consolidation. On the shorter timeframe both the IWM and SPY looked to try to break consolidation while the QQQ headed higher.

The week played out with Gold dropping lower Monday then drifting back up until a Friday sell as well but all in a narrow range over 2000 while Crude Oil continued in the lower end of the consolidation zone. The US Dollar remained in a tight range at support while Treasuries drifted lower in consolidation. The Shanghai Composite stalled at a second retest of the June 2022 high and reversed lower while Emerging Markets fell back to the low end of consolidation.

Volatility remained in the teens near the 52 week lows and moved in a narrow 2 point range. This was neutral for equities and they responded by starting the week with a 2 day move sideways. The QQQ then drifted higher the rest of the week while the IWM and SPY consolidated in choppy ranges. This resulted in the SPY and IWM ending little changed to the downside while the QQQ had a slight gain. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week rebounding off a retest of the support zone from the end of April. It held there at the 20 day SMA all week in an extremely narrow range of less than 6 points and under the February high. The daily chart shows the sideways action with the RSI flat and holding over the midline while the MACD is flat and positive.

The weekly chart shows the consolidation under the 100 week SMA. The RSI on this timeframe is flat under the bullish zone with the MACD rising and positive. There is resistance at 413.50 and 417.50 then 420 and 423 before 425.50. Support lower comes at 411 and 407.50 then 405.50 and 402.50 before 400.50. Consolidation.

SPY Weekly, $SPY

Heading into the May options expiration week, equity markets stalled and chopped around in narrow ranges. Elsewhere look for Gold to consolidate in the uptrend while Crude Oil consolidates in a broad range. The US Dollar Index continues in consolidation with perhaps a drift to the upside while US Treasuries consolidate in the bounce. The Shanghai Composite looks to continue in consolidation as well while Emerging Markets consolidate too.

The Volatility Index looks to remain very low and stable making the path easier for equity markets to the upside. Their charts are mixed though with the SPY in consolidation at the February high on both timeframes while the IWM consolidates just over support. The QQQ, however, looks strong on both timeframes chugging higher. Use this information as you prepare for the coming week and trad’em well.

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