SPY Trends and Influencers November 5, 2022

Last week’s review of the macro market indicators saw with just one trading day left in October, equity markets put in a strong week for the second week in a row. Elsewhere looked for Gold ($GLD) to continue its pullback while Crude Oil ($USO) consolidated. The US Dollar Index ($DXY) looked to pullback in the uptrend while US Treasuries ($TLT) bounced in their downtrend. The Shanghai Composite ($ASHR) looked to continue lower while Emerging Markets ($EEM) remained in a downtrend.

The Volatility Index ($VXX) looked to continue lower and only slightly elevated making the path easier for equity markets to the upside. Their charts were looking stronger on the shorter timeframe, especially the $IWM and $SPY. The $QQQ was only slightly weaker. All three looked stronger on the weekly timeframe.

The week played out with Gold pulling back to support and then rebounding back higher while Crude Oil continued to consolidate until it ripped higher Friday. The US Dollar found support crept back up to resistance before a Friday selloff while Treasuries met resistance and fell back to end lower. The Shanghai Composite found support and started higher on rumors of reopening while Emerging Markets held on consolidation in the downtrend until a gap up move to a 1 month high Friday.

Volatility held firm early and then unraveled as the week progressed. This held the pressure on equities early and they started the week drifting slightly lower. All accelerated lower Wednesday following the FOMC press conference but reversed to move back higher Friday. This resulted in the SPY, the IWM and the QQQ ending lower on the week. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week following a move up over the 50 day SMA. It held up Monday and then started to move lower Tuesday. The downward pressure continued through Thursday and then it saw buyers step in on Friday. It ended the week between the 20 and 50 day SMA’s on the daily chart and lower. The RSI turned up Friday as well and is back at the midline with the MACD looking to avoid a cross down and positive.

The weekly chart looks of consolidation after the two week move higher. The RSI on this timeframe is pulling back from the midline with the MACD trying to cross up but negative. There is resistance at 380 and 382 then 386 and 389.50 before 391.50 and 394.50. Support lower comes at 376 and 373 then 369 and 364.50 before 360 and 358. Bounce in Downtrend.

SPY Weekly, $SPY

With the first week of November in the books, equity markets showed how quickly they can lose their luster. Elsewhere look for Gold to pause its pullback while Crude Oil consolidates. The US Dollar Index looks to consolidate in the uptrend while US Treasuries resume their downtrend. The Shanghai Composite looks to possibly reverse the downtrend while Emerging Markets continue the move lower.

The Volatility Index looks to continue to drift lower from an elevated level making the path slightly easier for equity markets to the upside. Their charts look weak though on the shorter timeframe. On the longer timeframe both the IWM and SPY are holding up in the bounce. But the QQQ retesting the lows looks worse. Use this information as you prepare for the coming week and trad’em well.

Join the Premium Users and you can view the Full Version with 20 detailed charts and analysis: Macro Week in Review/Preview November 4, 2022  

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

blog comments powered by Disqus
Dragonfly Caps Blog