SPY Trends and Influencers September 4, 2021

• Posted by Greg Harmon
• on September 4th, 2021

Last week’s review of the macro market indicators saw with the last full week of August in the books, equity markets showed strength with aggressive moves higher and all-time highs. Elsewhere looked for Gold ($GLD) to continue its push out of long term consolidation higher while Crude Oil ($USL) might also resume the uptrend. The US Dollar Index ($DXY) looked on the edge of breaking the long downtrend, while US Treasuries ($TLT) paused in their uptrend. The Shanghai Composite ($ASHR) looked to continue in broad consolidation while Emerging Markets ($EEM) continued to be biased to move lower.

The Volatility Index ($VXX) looked to remain very low making the path easier for equity markets to the upside. Their charts also looked strong, especially on the shorter timeframe where the $IWM had a massive week. On the longer timeframe both the $QQQ and $SPY also looked great while the IWM remained in the broad consolidation.

The week played out with Gold running flat until a push higher Friday while Crude Oil drifted to the upside as the week progressed. The US Dollar Index instead resumed the short term downtrend while Treasuries continued to consolidate until a pullback Friday. The Shanghai Composite moved higher within the longer term consolidation while Emerging Markets made their first higher high since June suggesting a possible reversal.

Volatility continued to hold at very low levels moving in a tight range. This creates a favorable environment for equities and they responded by starting the week with a move higher Monday. The larger cap markets continued to drift up all week, making new all-time highs, while the small caps had a more pronounced move to the upside. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week at an all-time high. Monday saw a move higher and that was followed by 4 narrow candles making another high Thursday before a minor adjustment lower Friday. The entire week took place in a range of less than 3.5 points. The daily chart shows the steady progress up and to the right in parallel with all the SMA’s. The RSI is strong in the bullish zone with the MACD rising and positive.

The weekly chart looks just as good. The RSI is barely into overbought territory, very strong. The MACD is flat and positive at a high level. On both charts the Bollinger Bands® are also pointing higher. There is no resistance above 454 but the 200% extension of the retracement of the pandemic drop is at 458. Support lower comes at 447 and 446 then 444 and 437.50 before 436 and 430.50. Uptrend.

SPY Weekly, $SPY

Heading into Labor Day Weekend, the unofficial end of summer, equity markets showed strength across the board. Elsewhere look for Gold to continue its short term move higher while Crude Oil also moves to the upside. The US Dollar Index continues to move lower while US Treasuries consolidate in their uptrend. The Shanghai Composite looks to continue the move higher in broad consolidation while Emerging Markets show signs of a possible reversal higher.

The Volatility Index looks to remain very low making the path easier for equity markets to the upside. Their charts also look strong, especially on the shorter timeframe. On the longer timeframe both the QQQ and SPY show strength as well with new weekly highs. The IWM is showing strong progress as it moves towards teh top of the long consolidation range. Use this information as you prepare for the coming week and trad’em well.

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