SPY Trends and Influencers April 18, 2014

A weekly excerpt from the Macro Review analysis sent to subscribers on 10 markets and two timeframes.

Last week’s review of the macro market indicators suggested, moving into the shortened Passover and pre-Easter week that the equity markets looked to continue lower. Elsewhere looked for Gold ($GLD) and Crude Oil ($USO) to continue their moves higher. The US Dollar Index ($UUP) looked weak and headed lower, but with support nearby while US Treasuries ($TLT) might break the long consolidation to the upside. The Shanghai Composite ($SSEC) and Emerging Markets ($EEM) looked strong with a chance that Emerging Markets would consolidate for a bit. Volatility ($VIX) looked to remain subdued keeping the bias higher for the equity index ETF’s $SPY, $IWM and $QQQ, but it was biased to the upside and under watch. The equity index ETF’s themselves showed no signs of a reversal higher, only a continuation lower. They all still had room to major trend reversal levels but it appeared the short term direction was firmly lower.

The week played out with Gold starting higher before getting knocked back while Crude Oil made several tests higher but could not get through resistance. The US Dollar found that support and bounced while Treasuries broke to the upside but could not hold it to end the week. The Shanghai Composite pulled back to support while Emerging Markets consolidated. Volatility spiked to start the week but fell back to the recent lows to end it. The Equity Index ETF’s all found support early in the week and started back higher. What does this mean for the coming week? Lets look at some charts.

As always you can see details of individual charts and more on my StockTwits feed and on chartly.)

SPY Daily, $SPY
spy d
SPY Weekly, $SPY
spy w

The SPY looked ominous to start the week after a big fall ending the prior week. Monday’s long legged doji back above the 100 day SMA though was confirmed higher Tuesday and it continued up, ending the week above the 20 day SMA. It has yet to make a higher high, over the April 10th high, and will keep many at bay until then. The RSI on the daily chart moved back above the mid line but stalled Friday while the MACD is turned up but has yet to cross up to signal a buy. The price action has also traced out a bearish Shark harmonic with a Potential Reversal Zone II at 190.44. The stage is set. On the weekly chart the move takes it right back to the consolidation zone, erasing the move down from the prior week. The RSI is moving back higher after holding at the mid line, creating a RSI Positive Reversal set up that targets at least 197.30. The MACD is level but has not turned higher yet. There is resistance at 187.20 and 188 followed by 189.70. Support lower may be found at 185 and 184 followed by the 181.50 range where it held during this pullback. Continued Short Term Upward Price Action in the Long term Uptrend.

Heading into the May options cycle the equity markets are mixed. Elsewhere look for Gold to continue lower while Crude Oil continues to move up. The US Dollar Index seems ready to move sideways or pullback while US Treasuries are biased higher. The Shanghai Composite and Emerging Markets are both in consolidation mode with the Chinese market looking better lower and Emerging Markets biased to the upside. Volatility looks to remain low keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ, and potentially signaling for a new all-time high to come in the S&P 500. The equity Index ETF’s themselves paint a mixed picture with all rising on the short term, but the SPY the strongest and back at the consolidation zone, while the IWM and QQQ still have a lot of work to do to remove the intermediate term downward bias. Use this information as you prepare for the coming week and trad’em well.

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