SPY Has A Roller Coaster Week
Dragonfly Capital | Sep 21, 2014 12:32AM ET
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 September Options Expiration Week, that the equity markets look tired and ready for a pullback. Elsewhere looked for Gold to continue lower while Crude Oil did the same. The US Dollar Index was strong and looked to continue higher while US Treasuries (TLT ) were biased lower. The Shanghai Composite was also strong and biased higher while iShares MSCI Emerging Markets (ARCA:EEM) looked to continue their pullback. Volatility S&P 500 looked to remain subdued keeping the bias higher for the equity index ETF’s SPDR S&P 500 (ARCA:SPY), iShares Russell 2000 Index (ARCA:IWM) and PowerShares QQQ (NASDAQ:QQQ). Their charts showed more consolidation in the zone for the IWM and a possibility of consolidation or even a pullback for both the SPY and QQQ.
The week played out with Gold pushing lower to new lows on the year while Crude Oil caught a Dead Cat Bounce before falling back. The US Dollar continued its break out higher while Treasuries found support and consolidated. The Shanghai Composite consolidated around resistance while Emerging Markets continued their pullback. Volatility poked higher over the moving averages only to finish back below them. The Equity Index ETF’s had a mixed week with the IWM falling but the SPY and QQQ making new closing highs Thursday and then intraday highs on Friday before pulling back. What does this mean for the coming week? Lets look at some charts.
The SPY had a roller coaster week. Sunday night the world was going to end and it opened lower Monday only to rally to new all-time closing highs by Thursday. Friday would have been another record if it had not paid a dividend. The price action on the daily chart is mixed. The price did hold over the 20 day SMA Friday, but with a red candle. The RSI on the daily chart is in the bullish zone but may be making a lower top, caution, with a MACD that is crossing up though, a good sign. On the weekly chart the picture is much more clear. There is consolidation at the highs with a strong RSI and a MACD avoiding a cross down by moving sideways. There is support at 200 and 199 followed by 198.30 and 196.50. Resistance stands at the new high at 201.85, with a 150% Fibonacci extension above that at 202.78 and Measured Moves to 208 and 209. Consolidation with an Upward Bias, in the Uptrend.
Get The News You Want
As we close the books on the September Options cycle and move into Fall, the equity markets still look strong but a bit tired. Elsewhere look for Gold to continue lower along with Crude Oil. The US Dollar Index continues to look strong while US Treasuries are bouncing in their downtrend. The Shanghai Composite is also strong and looks better to the upside while Emerging Markets are biased to the downside. Volatility looks to remain subdued keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. The SPY and QQQ look the strongest but on the weekly timeframe, with some cracks on the daily charts. The IWM looks weak in the short run and probably continues towards the bottom if its consolidation zone. Use this information as you prepare for the coming week and trad’em well.
Disclaimer: 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.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.