SPY Trends and Influencers January 10, 2015

• Posted by Greg Harmon
• on January 10th, 2015

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, starting the first full week of 2015 week, the equity index ETF’s looked as though they may continue to the downside. Elsewhere looked for Gold ($GLD) to continue in its tight range while Crude Oil ($USO) continued lower. The US Dollar Index ($UUP) looked strong and should continue higher while US Treasuries ($TLT) were biased higher, and on the edge of a breakout.

The Shanghai Composite ($PEK, $ASHR) continued to look strong but very overbought while Emerging Markets were weak and biased to the downside. Volatility ($VIX) looked to remain subdued keeping the bias higher for the equity index ETF’s $SPY, $IWM and $QQQ, despite the moves lower this week. Their charts showed a downside bias with the QQQ leading the way and the IWM the strongest, possibly confirming a rotation from one to the other. The possible reversal candles Friday could always kick in and the indexes move higher though.

The week played out with Gold probing higher before breaking the consolidation to end the week up while Crude Oil made another run lower. The US Dollar continued higher while Treasuries made a new all-time high before pulling back slightly.

The Shanghai Composite found a short term top and pulled back slightly while Emerging Markets reversed to the late December highs. Volatility jumped to start the week but made a lower high before pulling back. The Equity Index ETF’s started the week lower but find higher lows early on and reversed back up.

What does this mean for the coming week? Lets look at some charts.

SPY Daily, $SPY

SPY Weekly, $SPY

The SPY started the week lower, before finding support a second time at the 150 day SMA. It bounced there, establishing a higher low, and rose until the end of the week. Friday saw a strong open before a long sell off and a bearish engulfing candle on the daily chart. The RSI on the daily chart is stalling at the mid line while the MACD is turning back higher towards a positive cross. Maybe this is just a one day event for the pullback. Next week will tell.

The weekly chart shows a doji, showing indecision. The last 10 weeks now form a consolidation zone between 200 and 208.50. The RSI on the weekly timeframe remains in the bullish zone but pointing lower short term while the MACD is about to cross down. Perhaps a visit to the bottom of the range. There is support lower at 204.30 and 202.30 followed by 200. Resistance higher comes at 205.70 and 206.80 before 208.72. Broad Consolidation in the Uptrend.

Heading into the January Options Expiration week the equity markets look at best to be consolidating. Elsewhere look for Gold to bounce higher in the possible bottoming while Crude Oil continues lower. The US Dollar Index looks ready to pause or pullback in its uptrend while US Treasuries are biased higher. The Shanghai Composite also may be ready for a pause or short term pullback in the uptrend while and Emerging Markets are consolidating and biased to the downside.

Volatility looks to remain subdued but perhaps slightly drifting up,keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ, but less so marginally. Their charts suggest some consolidation is in order and perhaps a short term pullback. 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 January 9, 2015

Want to learn more about Dragonfly Capital Views?
Dragonfly Capital Views Performance Through December 2014 Expiry and sign up here

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