SPY Trends and Influencers November 28, 2020

Last week’s review of the macro market indicators saw heading into the shortened holiday weekend, equity markets had paused to catch their breath. Elsewhere looked for Gold ($GLD) to continue in consolidation while Crude Oil ($USL) continued a short term uptrend in a broad range. The US Dollar Index ($DXY) looked to consolidate at the bottom of a broad range while US Treasuries ($TLT) were showing a possible reversal higher.

The Shanghai Composite ($ASHR) looked to continue to mark time moving sideways while Emerging Markets ($EEM) moved higher in an uptrend. The Volatility Index ($VXX) looked to continue to drift lower making the path easier for equity markets to the upside. Their charts continued to look strong, especially on the longer timeframe as they held at highs. On the shorter timeframe both the $QQQ and $SPY were in consolidation mode moving sideways while the $IWM looked stronger moving up.

The week played out with Gold falling through support and ending below 1800 for the first time since early July while Crude Oil the break out to the upside. The US Dollar broke down through support to end at 2½ year lows while Treasuries dropped back from a lower high. The Shanghai Composite met resistance and pulled back while Emerging Markets continued higher to close at a 31 month high.

Volatility drifted lower ending the week in the February gap at a 9 month low. This took pressure off equites and they responded by moving higher. All found support by Wednesday and reversed to finish the week little changed. The IWM and SPY continued to new all-time highs before consolidating at the end of the week. The QQQ was the laggard but is quickly catching up and ending the week at highs and only 1% from all-time highs. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week holding over a break of the symmetrical triangle and at a retest of the September highs. It held there Monday and then moved higher Tuesday. It dropped back into the holiday and then regained some ground Friday to finish at new all-time highs. The daily chart shows the drift up with the RSI holding strong in the bullish zone and the MACD lifting and positive.

The weekly chart is easy to see the new high as it presses against resistance. The RSI is rising in the bullish zone with the MACD moving higher and positive. There is resistance at 364 and a target on the triangle break to 390 above that. Support lower comes at 358 and 356 then 353 and 348.20 before 346. Uptrend.

SPY Weekly, $SPY

Heading into the first week of December, equity markets have moved out of consolidation and are showing strength. Elsewhere look for Gold to continue its pullback while Crude Oil drives higher. The US Dollar Index continues to move to the downside while US Treasuries resume the move lower. The Shanghai Composite looks to continue press against resistance while Emerging Markets trend to the upside.

The Volatility Index looks to continue towards a new lower range making the path easier for equity markets to the upside. Their charts are looking strong again, especially on the longer timeframe. On the shorter timeframe both the QQQ and SPY are starting to break ranges higher with the IWM leading them to the upside. Use this information as you prepare for the coming week and trad’em well.

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