SPY Trends and Influencers November 9, 2019

• Posted by Greg Harmon
• on November 9th, 2019

Last week’s review of the macro market indicators saw that with another FOMC meeting in the books and the calendar turning to November equities were breaking to new highs. Elsewhere looked for Gold ($GLD) to consolidate in its uptrend while Crude Oil ($USO) consolidated as well. The US Dollar Index ($DXY) was consolidating at support in a rising channel while US Treasuries ($TLT) consolidated in their downtrend.

The Shanghai Composite ($ASHR) continued in a tightening consolidation while Emerging Markets ($EEM) moved to the upside in their broad consolidation.  Volatility ($VXXB) ad eased and looked 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 were looking strong as they made new all-time highs while the IWM approached the top of its long wide consolidation.

The week played out with Gold breaking to the downside and continuing lower while Crude Oil rose slightly early but gave back most of the gain as it consolidated. The US Dollar rose up out of consolidation while Treasuries continued to move lower. The Shanghai Composite continued to tighten in its consolidation while Emerging Markets met resistance as they made six month highs.

Volatility continued to hold at very low levels,making the path higher the easier one for equities. The Equity Index ETF’s started the week gapping higher but had closed the gaps by Wednesday. Another gap up Thursday was closed by Friday as they held at higher levels. This resulted in the SPY and QQQ making new all-time highs with the IWM at the very top edge of the long consolidation. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week at all-time highs after breaking a short consolidation. Monday saw it gap higher again. It held there, with a dip intraday Wednesday to close the gap, and then continued higher Thursday. It could not hold those highs and printed a possible reversal candle.

But Friday saw another move higher, negating that candle and closing the week at another new all-time high. The daily chart shows the RSI moving high in the bullish zone with the MACD rising and positive. The price is following the upper end of the Bollinger Bands® as they continue to point higher.

The weekly chart shows continuation out of the triangle breakout toward the target of 333 and 350 beyond that. The Point and Figure price objective is now at 407. The RSI is rising and bullish with the MACD positive and moving up. There is no resistance higher. Support lower comes at 307 before 304.80 then 303.50 and 302 before 301 and 300. Uptrend.

SPY Weekly, $SPY

Moving into November options expiration the bull market is back on in force, with the small caps on the edge of joining the party. Elsewhere look for Gold to continue in its short term downtrend while Crude Oil consolidated. The US Dollar Index is drifting to the upside while US Treasuries continue to move lower. The Shanghai Composite looks to continue to hold tight around 3000 while Emerging Markets pause in their uptrend.

Volatility looks to remain very low keeping the bias to upside for the equity index ETF’s SPY, IWM and QQQ. The SPY and QQQ have broken out and are renewing the bull market while the IWM is on the cusp of a break out that could attract more buyers. Use this information as you prepare for the coming week and trad’em well.

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