SPY Trends and Influencers: Monthly Edition May into June 2013

• Posted by Greg Harmon
• on June 3rd, 2013

Last month in this space my Monthly Macro Review/Preview had the monthly outlook suggesting that the long party for Gold ($GLD) was ending and Copper ($JJC) was joining it lower. Crude Oil ($USO) looked to continue to move in a tightening range while Natural Gas ($UNG) ran higher. The US Dollar Index ($UUP) also looked to flounder sideways as US Treasuries ($TLT) resumed their uptrend. The Shanghai Composite ($SSEC) looked to continue to move lower as Emerging Markets ($EEM) continued to consolidate and the German DAX ($DAX) looked better towards new highs. Volatility ($VIX) could go either way but looked to remain low with the VIX heading towards a historic low range. These factors in aggregate supported further upside movement for the Equity Index ETF’s $SPY, $IWM and $QQQ. Treasuries moving higher seemed counter intuitive to rising equity prices but noted there was historic precedent for it for extended periods of time. How does an additional month impact the longer term picture? Let’s look at some charts.

As always you can see details of individual charts and more on my StockTwits feed and on chartly.)

SPY, $SPY

The SPY pushed to new all-time highs, over the mid-line between the Median Line and the Upper Median Line of the Andrew’s Pitchfork. It did pullback from the highs a bit but has held well over that mid line. Continuation should lead to attraction to the Upper Median Line eventually. That would be very bullish. The RSI is bullish but moving into technically overbought territory with a MACD that is rising. Both support more upside price action. The Bollinger bands are opening higher, but there is that upper shadow in May. There is no resistance higher but a 127% extension takes it to 182. Support is found below at 158 and then 141.40. Continued Upside.

The monthly outlook suggests the upside for Gold will continue while Copper may continue to drift. Crude Oil is also set up to continue to consolidate as Natural Gas moves higher. The US Dollar Index Looks stuck in the tightening triangle with US Treasuries biased to break the long consolidation to the downside. The Shanghai Composite looks better to the upside, but not nearly as strong as the German DAX while Emerging Markets look to continue to move lower. Volatility can go either way but looks to remain low keeping a tailwind at the backs of the Equity Index ETF’s. The Equity Index ETF’s themselves, SPY, IWM and QQQ, are set up to continue higher in the coming months with the trend in the QQQ the strongest. Use this information to understand the long term trends in Equities and their influencers as you prepare for the coming months.

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