SPY Trends and Influencers February 21, 2015

• Posted by Greg Harmon
• on February 21st, 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, heading into a shortened February Options Expiration week the equity markets looked strong, breaking long consolidations to the upside.

Elsewhere looked for Gold ($GLD) to continue lower in the short term in the longer consolidation while Crude Oil ($USO) consolidated, and might be ready to reverse higher. The US Dollar Index ($UUP) looked to continue in a consolidation range while US Treasuries ($TLT) were biased lower. The Shanghai Composite ($ASHR) looked to continue to pullback in the uptrend and Emerging Markets ($EEM) looked to hold in the bear flag, and might prove it a reversal higher.

Volatility ($VXX) looked to remain subdued and drifting lower, keeping the bias higher for the equity index ETF’s $SPY, $IWM and $QQQ. Their charts all looked strong on both the daily and weekly timeframes. If you had to pick a weakness then the gaps in the QQQ chart and move out of the Bollinger Bands® might signal short term exhaustion not seen in the SPY and IWM.

The week played out with Gold pushing lower to 1200 while Crude Oil showed it is not yet ready for a rebound. The US Dollar continued to consolidate while Treasuries found support and are cling to it. The Shanghai Composite continued the rebound higher in a very short week while Emerging Markets consolidated their move over the 20 day SMA.

Volatility made an attempt higher but was smacked back quickly to finish at 2015 lows. The Equity Index ETF’s started the week new highs. After some settling in they ended the week with yet another new high. What does this mean for the coming week? Lets look at some charts.

SPY Daily, $SPY

The SPY started Tuesday just inching over the Friday all-time high close in a small body candle. Wednesday and Thursday continued the consolidation at the new highs before Friday turned the SPY higher on relatively higher volume, ending the week at a new all-time high. The daily chart shows the RSI moving higher in the bullish zone with the MACD rising, both supporting more upside price action.

The weekly chart shows continuation higher for a third week, and of the peek over the consolidation box that ended the prior week. The RSI on this timeframe is in the bullish zone and rising with the MACD crossing up, also bullish. There is resistance (possibly) higher at 212.97 and then Measured Moves to 214 and 225 above. Support lower may come at 210.25 and 209 followed by 206.40. Continued Uptrend.

SPY Weekly, $SPY

Heading into the end of February the Equity markets are strong moving out of consolidation higher. Elsewhere look for Gold to continue lower in the short term while Crude Oil continues to consolidate after its bounce. The US Dollar Index also looks to continue to consolidate sideways while US Treasuries are biased lower. The Shanghai Composite and Emerging Markets are both consolidating with a bias to break that to the upside.

Volatility looks to remain subdued keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ, despite the moves higher this week. Their charts also suggest more upward price action on both the daily and weekly view. This is the first week in a while that all 3 Index ETF’s have looked strong. Use this information as you prepare for the coming week and trad’em well.

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