SPY Trends and Influencers November 2, 2019

• Posted by Greg Harmon
• on November 2nd, 2019

Last week’s review of the macro market indicators saw equity markets make a strong move in the run up week to the October FOMC meeting, led by the small caps and punctuated by a new all-time high in the Nasdaq 100. Elsewhere looked for Gold ($GLD) to continue to build its bull flag while Crude Oil ($USO) moved higher in broad consolidation. The US Dollar Index ($DXY) looked to continue to drift to the upside while US Treasuries ($TLT) resumed their pullback.

The Shanghai Composite ($ASHR) looked to continue to churn in consolidation while Emerging Markets ($EEM) rose in broad consolidation.  Volatility ($VXXB) looked to continue to remain very low keeping the bias higher for the equity index ETF’s $SPY, $IWM and $QQQ. The QQQ looked to continue higher after making a new all-time high and the SPY appeared to be following right behind it. The IWM continued to churn in a wide consolidation but with movement to the upside.

The week played out with Gold breaking the bull flag to the upside while Crude Oil channeled lower. The US Dollar reversed lower and continued all week suggesting it was in a bear flag while Treasuries found support and reversed late in the week. The Shanghai Composite continued to tighten the consolidation range while Emerging Markets continued to move higher in broad consolidation.

Volatility continued to run at very low levels, creating an easier path for equities to rise. The Equity Index ETF’s started the week gapping up Monday. The SPY and QQQ held on and then continued higher at the end of the week. The IWM gave the early move back before recovering at the end of the week and moving higher. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week at the all-time high, for the third time. Monday saw the break through with a gap up and close at a new all-time high. It held Tuesday and then made a higher high Wednesday. Thursday was another small pullback and then it rose again Friday to close the week at all-time highs.

The daily chart shows the break out of a 5 month long ascending triangle, with a target to 330. A secondary target is established above that to 355. The RSI is rising and bullish with the MACD positive and moving higher, with the price following the expanding Bollinger Bands®.

The weekly chart shows a strong break out candle as the 4th up week in a row. The RSI is rising and bullish with lots of room above. The MACD is crossed back up and positive after resetting lower. There is no resistance over 306. Support lower comes at 304.80 and 303.50 then 302 and 301 before 300 and 298.80 then 296.50. Uptrend.

SPY Weekly, $SPY

With another FOMC meeting in the books and the calendar turning to November equities are breaking to new highs. Elsewhere look for Gold to consolidate in its uptrend while Crude Oil consolidates as well. The US Dollar Index is consolidating at support in a rising channel while US Treasuries consolidate in their downtrend. The Shanghai Composite continue in a tightening consolidation while Emerging Markets move to the upside in their broad consolidation.

Volatility has eased and looks to remain very low keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. The SPY and QQQ both broke ranges and are looking strong as the make new all-time highs while the IWM approaches the top of its long wide consolidation. Use this information as you prepare for the coming week and trad’em well.

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