SPY Trends and Influencers: Monthly Edition January into February 2014

• Posted by Greg Harmon
• on February 3rd, 2014

A monthly excerpt from the Premium subscriber version covering all 13 markets.

Last month A Longer Perspective, a series of posts on the broad market replaced the monthly view. But at the end of November in this space my Monthly Macro Review/Preview had the monthly outlook suggesting the downside for Gold ($GLD) would continue while Copper ($JJC) continued to consolidate with a downward bias. Crude Oil ($USO) looked better to the downside with Natural Gas ($UNG) staging a rally. The US Dollar Index ($UUP) was unperturbed, continuing sideways in a narrow range while US Treasuries ($TLT) were also consolidating but with a downward bias. In the foreign markets the Shanghai Composite ($SSEC) and Emerging Markets ($EEM) looked best to continue to consolidate while the German DAX ($DAX) looked strong like an ox. Volatility ($VIX) looked to remain very low and showed no signs of a significant change continuing to blow a strong breeze behind equities. The Equity Index ETF’s $SPY, $IWM and $QQQ were set up to continue higher in the coming months, but one indicator, the RSI was starting to move into cautious territory. How does an additional month impact the longer term picture? Let’s look at some charts.

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

SPY, $SPY

The SPY made a marginal new high in January before pulling back. The move lower is approaching the 113% extension of the move lower during the financial collapse. It is also attracting back towards the mid line between the Median Line and Upper Median Line of the Andrew’s Pitchfork. The RSI had been technically overbought, but is working off that condition as the MACD may be flattening. There is resistance now at 185 and a 127% extension above at 189.12. Support lower comes at 170.50 and 157.50 would be a retest of the long term breakout. Consolidation or Pullback in the Uptrend.

The monthly outlook heading into February suggests the equity markets may see some consolidation or downside. Gold continues to be biased lower although it may consolidate as Copper continues to consolidate. Crude Oil looks to continue to drift higher and Natural Gas is also biased to the upside, and a bit stronger. US Treasuries look to continue their bounce in the downtrend while the US Dollar Index drifts sideways. The Shanghai Composite looks weak in its downtrend and Emerging Markets look to continue to move lower int heir broad consolidation while the German DAX may be ready for a pullback or consolidation. Volatility looks to remain low but drifting higher, lightening the breeze at the backs of US Equities. The Equity Index ETF’s SPY, IWM and QQQ look ready for a rest at least and perhaps a pullback. Use this information to understand the long term trends in Equities and their influencers as you prepare for the coming months.

For complete analysis of the 13 markets summarized here join the premium service and read Macro Month in Review/Preview January into February 2014 or send me an e-mail requesting a special Macro package.

For much more detail on a Longer Perspective, pick up my eBook here.

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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.

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