SPY Continues Where It Left Off
Dragonfly Capital | Aug 23, 2014 03:35PM ET
Last week’s review of the macro market indicators suggested, as the books were closed on the August Options Expiration and we headed into the last week of Summer that the equity markets were still with some turbulence. Elsewhere looked for Gold to bounce around the 1300 level while Crude Oil continued to be biased lower. The US Dollar Index looked toppy and possibly ready for a correction lower while US Treasuries continued to be biased higher. The Shanghai Composite and iShares MSCI Emerging Markets (ARCA:EEM) were consolidating but with the Chinese market biased higher and Emerging Markets having trouble at resistance and looking toppy. Volatility S&P 500 looked to remain low keeping the bias higher for the equity index ETF’s SPDR S&P 500 (ARCA:SPY),
The SPY continued where it left off and rose for 4 days before consolidating Friday. Along the way it made a new all-time high. The RSI on the daily chart is curling over with the doji print Friday but remains in the bullish zone and the MACD is continuing higher. Both support the doji resolving higher. The weekly chart shows follow through continuation higher off of the Hammer reversal two weeks ago. The RSI is rising and bullish with room to spare above and the MACD is turning back higher, approaching a positive cross. Very strong on this timeframe. There is no resistance higher but expect that the round number 200 could give it some pause and then there is a Measured Move higher to 208. Support lower may come at 199 and 198.30 before 196.50 and 195. Possible Consolidation in the Uptrend.
Heading into the last week of Summer the equity markets are looking strong and ready for more. Elsewhere look for Gold to continue lower in its intermediate term consolidation phase while Crude Oil continues lower. The US Dollar Index and US Treasuries look to continue to the upside. The Shanghai Composite also looks strong and is biased higher while Emerging Markets try to burn through past history near resistance and may consolidate for another week in their uptrend. Volatility looks to remain subdued keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. The QQQ’s continue to look very strong and are biased higher while the SPY is not quite as strong on the shorter timeframe and may need to consolidate. Both are at big round numbers that could stall any further move. The IWM looks to continue to improve in its consolidation range. Use this information as you prepare for the coming week and trad’em well.
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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