SPY Trends and Influencers September 14, 2024

• Posted by Greg Harmon
• on September 14th, 2024

Last week, the review of the macro market indicators saw with the first week of September in the books, equity markets reverted to weakness, trending lower all week. Elsewhere looked for Gold ($GLD) to continue its uptrend while Crude Oil ($USO) continued to move lower. The US Dollar Index ($DXY) continued in broad consolidation while US Treasuries ($TLT) showed signs of a possible new uptrend. The Shanghai Composite ($ASHR) looked to continue the downtrend while Emerging Markets ($EEM) dropped back into a short term downtrend.

The Volatility Index ($VXX) looked to shift from low and stable to low and rising making the path more difficult for equity markets. Their charts looked weak on the shorter time frame as price pulled back from a lower high, but they remained above making a lower low for now. On the longer timeframe they looked stronger, but vulnerable with the $SPY strongest then the $IWM and the $QQQ the weakest.

The week played out with Gold pushing out of consolidation to the upside and ending at a new all-time high while Crude Oil found support and reversed higher midweek. The US Dollar met resistance and fell back in consolidation while Treasuries met resistance at a retest of the 2023 high and paused. The Shanghai Composite continued lower, closing in on the February low, while Emerging Markets found support and rose back over resistance.

Volatility moved lower all week to end just above the August low. This gave equities a boost midweek and they responded with a 3 day move higher to end the week. This resulted in the SPY back within spitting distance of the all-time high and the QQQ and the IWM ending back over their short term moving averages. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week in a pullback from a near retest of the top on the daily chart. It printed an inside day Monday and rose slightly Tuesday head of the CPI report Wednesday morning. In reaction to the report, it opened and drove lower for the 1st hour before reversing and ripping higher to close up 2.6% off the low of the day. It continued higher the rest of the week ending back at the August high. The RSI is rising near 60 with the MACD crossed up and positive.

The weekly chart shows the reversal of the prior week’s drop, noting that price held at the 20 week SMA. The 161.8% extension of the retracement of 2022 drop continues to play a key role as resistance. The RSI is rising in the bullish zone with the MACD flat and positive. There is resistance higher at 565.50. Support lower is at 561.50 and 556.50 then 549.50 and 545.75 before 542 and 540. Consolidation in Uptrend.

SPY Weekly, $SPY

Heading into the September FOMC meeting and Options Expiration, equity markets showed strength with a rebound from the week prior. Elsewhere look for Gold to continue its uptrend while Crude Oil consolidates in a short term downtrend. The US Dollar Index continues to drift lower in consolidation while US Treasuries are on the edge of a reversal to an uptrend. The Shanghai Composite looks to continue the downtrend while Emerging Markets consolidate.

The Volatility Index looks to remain low and stabilizing making the path easier for equity markets to the upside. Their charts look strong, especially on the longer timeframe with the SPY on the edge of break to new highs while the IWM and QQQ hold near recent highs. On the shorter timeframe the SPY is also strong with the IWM and QQQ possibly building tightening consolidation zones. Use this information as you prepare for the coming week and trad’em well.

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