SPY Trends and Influencers November 11, 2023

Last week, the review of the macro market indicators saw with just 2 months left in the year, equity markets showed strength with a strong rebound after a weak October. Elsewhere looked for Gold ($GLD) to continue to consolidate at the highs while Crude Oil ($USO) entered a short term downtrend. The US Dollar Index ($DXY) was in a possible reversal lower while US Treasuries ($TLT) bounced in their downtrend. The Shanghai Composite ($ASHR) and Emerging Markets ($EEM) both looked to continue their bounces in their downtrends.

The Volatility Index ($VXX) looked to remain low after a sharp reversal making the path easier for equity markets to the upside. Their charts also looked strong, especially on the shorter timeframe with strong volume breakaway moves higher. On the longer timeframe both the $QQQ and $SPY were on the cusp of reversals while the $IWM also looked strong.

The week played out with Gold dropping down out of consolidation while Crude Oil continued the move lower. The US Dollar found support in a pullback and reversed higher while Treasuries stalled in their bounce higher. The Shanghai Composite met resistance and fell back Friday while Emerging Markets peaked Monday and drove lower the rest of the week.

The Volatility Index held in a tight range at the recent low. This should have removed pressure from equities and they moved higher early in the week but could not sustain any significant additional move higher until Friday when all raced higher. This resulted in the SPY and the QQQ ending the week at higher highs. The exceptions was the IWM which moved lower all week and added a weak bounce Friday. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week approaching the early October highs after the biggest week of the year. It was back over the 50 day SMA on the daily chart for the first time since 1 day in mid-September. It continued up Monday but with a small body candle and added a small gain again Tuesday and Wednesday before a pullback Thursday erased those gains. Friday saw a trend day higher though and price end at a 2 month high and close the gap down from September. The RSI is into the bullish zone and rising with the MACD positive and rising.

The weekly chart shows a smaller second weekly candle higher but closing at the high of the week and over the 20 week SMA. This continues the move higher after testing the 100 week SMA. The move looks to take price out of a bull flag to the upside, a continuation signal. The RSI is rising in the bullish zone with the MACD positive and curling to cross up. There is resistance above at 444 and 447 then 451 and 454 before 457. Support lower sits at 437.50 and 435 then 430 and 428.50 before 425.50 and 423.50. Short Term Uptrend.

SPY Weekly, $SPY

With the first full week of November in the books, midcap and large cap equity markets showed continued strength after a slow consolidating start. Elsewhere look for Gold to continue its pullback while Crude Oil joins it with a turn to the downside. The US Dollar Index continues to drift in consolidation while US Treasuries bounce in their downtrend. The Shanghai Composite looks to continue its bounce as well while Emerging Markets consolidate.

The Volatility Index looks to remain very low making the path easier for equity markets to the upside. Their charts look strong, especially on the shorter timeframe. On the longer timeframe both the QQQ and SPY look to continue higher after breaking out of bull flags. The small cap IWM continues to languish on all timeframes though. Use this information as you prepare for the coming week and trad’em well.

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