SPY Trends and Influencers May 27, 2023

Last week, the review of the macro market indicators saw with the May options expiration in the books, equity markets showed strength with the major indexes moving to higher highs. Elsewhere looked for Gold ($GLD) to continue its pullback in consolidation while Crude Oil ($USO) consolidated in a broad range. The US Dollar Index ($DXY) continued to drift to the upside while US Treasuries ($TLT) pulled back in their consolidation. The Shanghai Composite ($ASHR) and Emerging Markets ($EEM) looked to continue their consolidation as well.

The Volatility Index ($VXX) looked to remain low and stable making the path easier for equity markets to the upside. Their charts looked strong, especially on the longer timeframe. On the shorter timeframe both the $QQQ and $SPY had reconfirmed their uptrends. The $IWM, however, remained mired in a consolidation range.

The week played out with Gold pausing early before dropping back to end the week lower while Crude Oil consolidated, building a bear flag. The US Dollar continued to move higher while Treasuries fell back to end near the March low. The Shanghai Composite fell out of short term consolidation to a new 4 month low before it found support and bounced higher while Emerging Markets continued in the narrow consolidation range.

Volatility rose early in the week but remained in the teens and reversed to end little changed. This put initial pressure on equities and they started the week with a move lower. The SPY and QQQ found support by Wednesday and reversed. This resulted in the SPY finishing the week little changed but the QQQ ending at a new 13 month high. The IWM lagged, finding support Thursday before a bounce. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week stalling at a higher high. It held in pace Monday and then went through a 2 day move to the downside back to the consolidation range for May. Thursday it jumped back over its 20 day SMA and Friday ran higher to finish the week at a new 9 month high. There remains a gap open above from August 2022 on the daily chart. The RSI is rising in the bullish zone with the MACD flat but positive.

The weekly chart shows a bullish engulfing candle moving over the 100 week SMA with the Bollinger Bands® open higher. The RSI on this timeframe is less than a point away from a move into the bullish zone with the MACD positive and climbing. There is resistance at 423.50 and 425.50 then 428.50 and 430 before 435.50 and 437.50 then 441. Support sits at 420 followed by 417.50 and 413.50 then 411 and 407.50 before 405.50 and 402.50. Uptrend.

SPY Weekly, $SPY

Heading into Memorial Day Weekend and the start of summer trading, equity markets were mixed with Tech and Large Caps showing strength while Small Caps languished sideways. Elsewhere look for Gold to continue its pullback in the uptrend while Crude Oil consolidates in a broad range. The US Dollar Index continues to drift to the upside while US Treasuries pullback in consolidation. The Shanghai Composite looks to continue a short term move lower while Emerging Markets consolidate.

The Volatility Index looks to remain 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 the QQQ is strong as well with the SPY breaking out to join it. The IWM continues to be the problem child moving sideways for over 2 months now. Use this information as you prepare for the coming week and trad’em well.

Join the Premium Users and you can view the Full Version with 20 detailed charts and analysis: Macro Week in Review/Preview May 26, 2023

Special Memorial Day Sale Pricing. 30% off Annual or Quarterly Subscriptions

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

blog comments powered by Disqus
Dragonfly Caps Blog