SPY Trends and Influencers November 7, 2020

• Posted by Greg Harmon
• on November 7th, 2020

Last week’s review of the macro market indicators saw with ten months in the books, equity markets looked to start November sitting on support with downside momentum building into the election. Elsewhere looked for Gold ($GLD) to continue its pullback while Crude Oil ($USL) began a new downtrend. The US Dollar Index ($DXY) continued to rise in consolidation while US Treasuries ($TLT) continued in their downtrend.

The Shanghai Composite ($ASHR) looked to continue to consolidate while Emerging Markets ($EEM) pulled back in their uptrend. The Volatility Index ($VXX) was spiking, putting a headwind against the equity markets. Their charts were all in downtrends on the shorter timeframe. On the longer timeframe both the $QQQ and $SPY sat on support and at risk of a break down. The $IWM continued to lead, holding up the best of the three.

The week played out with Gold reversing and pushing to the upside while Crude Oil found support and bounced. The US Dollar met resistance and pulled back to 2 month lows while Treasuries found support and rose to resistance early before falling back. The Shanghai Composite rose in consolidation while Emerging Markets broke out to 2½ year highs.

Volatility settled and then fell back mid week to end at the October lows. This lifted the pressure off equities and they soared higher. All leveled off Friday after a four day run up. This resulted in the SPY and QQQ ending back near all-time highs but shy of the October high with the IWM leading and making a new 21 month high. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week accelerating a pull back from a lower high. It held there Monday and then started to move higher Tuesday. Wednesday saw a big move higher and another Thursday with consolidation Friday. It ended the week just shy of the October highs and at what would be trend resistance at the top of a symmetrical triangle. This would be the fifth touch, where powerful moves often happen when if it breaks through. The target on a break of the triangle would be a move to 390.

The daily chart shows the RSI rising in the bullish zone with the MACD crossed up and now positive. The weekly chart shows a massive candle moving higher toward resistance and just pennies below the highest weekly close ever. The RSI is rising in the bullish zone with the MACD flat and positive. The Bollinger Bands® are opening higher. There is resistance at 353 and 357.70. Support lower comes at 348.80 and 346 then 344.70 and 342.20 before 341. Short Term Uptrend in Consolidation.

SPY Weekly, $SPY

The first week of November was an eventful one with a Presidential election that is still unresolved, a FOMC meeting and a non-farm payrolls report to attack markets, and they reacted like champs with an impressive move to the upside all week. Elsewhere look for Gold to continue its move higher while Crude Oil consolidates in a broad range. The US Dollar Index looks to move lower in consolidation while US Treasuries remain in a downtrend. The Shanghai Composite looks to continue to consolidate while Emerging Markets break out to the upside.

The Volatility Index is moving back to a normal range 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 are back at resistance at all-time highs with the IWM trending higher towards its best print. 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 6, 2020  

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