SPY Trends and Influencers May 3, 2025

• Posted by Greg Harmon
• on May 3rd, 2025

First a shout out to my father who turned 96 yesterday. Happy Birthday Dad!

Last week, the review of the macro market indicators saw with just 3 trading days left in April, equity markets showed signs that the bottom might be in for this correction. Elsewhere looked for Gold ($GLD) to continue to digest its historic move higher while Crude Oil ($USO) consolidated a possible new downtrend under support. The US Dollar Index ($DXY) was set up for a reversal to the upside while US Treasuries ($TLT) consolidated the downtrend. The Shanghai Composite ($ASHR) looked to continue to consolidate in a tight range while Emerging Markets ($EEM) were poised for more upside in broad consolidation.

The Volatility Index ($VXX) looked to remain elevated but moving lower making the path easier for equity markets to the upside. Their charts showed signs of a reversal on both timeframes. On the shorter timeframe the $IWM, the $QQQ and the $SPY were breaking short term resistance. On the longer timeframe all were printing large engulfing candles over key price levels.

The week played out with Gold continuing to drift lower towards support while Crude Oil dropped back to 4 year lows. The US Dollar failed to break higher but was stable at 3 year lows while Treasuries held in consolidation at the bottom of the range. The Shanghai Composite continued to drift lower in a holiday shortened week while Emerging Markets continued higher capping off the week with a gap to 6 week highs.

Volatility continued to move lower on the week but still elevated. This eased the pressure off of equities and they continued to move higher all week. This resulted in the SPY, QQQ and IWM all printing 5 week highs and strengthening the case that the bottom is in for this cycle. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week at resistance and on the verge of a reversal confirmation after pushing into the April 3rd opening gap. It held there Monday before rising Tuesday and extending higher for the rest of the week. It jumped over the 50 day SMA for the first time since February 21st and finished at a 5 week high. The RSI is peeking into the bullish zone with the MACD rising into positive territory as price pushes the Bollinger Bands® open.

The weekly chart shows a continuation candle for the week ending at the high and over the 161.8% extension of the retracement of the 2022 drop. The RSI is rising at the midline with the MACD negative but curling up from a near retest of the 2022 lows. There is support lower at 565.50 and 556.50 then 549.50 and 545.75 before 542 and 540. Resistance above is at 571.50 and 574.50 then 581 and 585 before 590 and 593. Short Term Reversal Higher.

SPY Weekly, $SPY

With April in the books and the FOMC meeting next week, equity markets signaled that the bottom is in for this correction. Elsewhere look for Gold to continue to digest its historic move higher while Crude Oil resumes a new downtrend under support. The US Dollar Index remains in a short term downtrend, failing to continue a reversal, while US Treasuries consolidate the downtrend. The Shanghai Composite looks to continue to consolidate in a tight range while Emerging Markets are poised for more upside in broad consolidation nearing resistance.

The Volatility Index looks to remain slightly elevated but moving lower making the path easier for equity markets to the upside. Their charts show short term strength on both timeframes. On the shorter timeframe the IWM, the QQQ and the SPY are breaking short term resistance on a shift to bullish momentum. On the longer timeframe the classic “V” recovery is showing up in all 3 Index ETFs. Use this information as you prepare for the coming week and trad’em well.

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