SPY Trends: Continued Short Term Upward Price Action i
Dragonfly Capital | Apr 18, 2014 03:39PM ET
Last week’s review of the macro market indicators suggested, moving into the shortened Passover and pre-Easter week that the equity markets looked to continue lower. Elsewhere looked for Gold (ARCA:GLD)) and Crude Oil (USO)) to continue their moves higher. The US Dollar Index (PowerShares db USD Index Bullish (UUP)) looked weak and headed lower, but with support nearby while US Treasuries (ARCA:TLT) might break the long consolidation to the upside. The (Shanghai Composite) and Emerging Markets (ARCA:EEM) looked strong with a chance that Emerging Markets would consolidate for a bit. Volatility (VIX) looked to remain subdued keeping the bias higher for the equity index ETF’s (ARCA:SPY), (ARCA:IWM) and (NASDAQ:QQQ), but it was biased to the upside and under watch. The equity index ETF’s themselves showed no signs of a reversal higher, only a continuation lower. They all still had room to major trend reversal levels but it appeared the short term direction was firmly lower.
The week played out with Gold starting higher before getting knocked back while Crude Oil made several tests higher but could not get through resistance. The US Dollar found that support and bounced while Treasuries broke to the upside but could not hold it to end the week. The Shanghai Composite pulled back to support while Emerging Markets consolidated. Volatility spiked to start the week but fell back to the recent lows to end it. The Equity Index ETF’s all found support early in the week and started back higher. What does this mean for the coming week? Lets look at some charts.
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Heading into the May options cycle the equity markets are mixed. Elsewhere look for Gold to continue lower while Crude Oil continues to move up. The US Dollar Index seems ready to move sideways or pullback while US Treasuries are biased higher. The Shanghai Composite and Emerging Markets are both in consolidation mode with the Chinese market looking better lower and Emerging Markets biased to the upside. Volatility looks to remain low keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ, and potentially signaling for a new all-time high to come in the S&P 500. The equity Index ETF’s themselves paint a mixed picture with all rising on the short term, but the SPY the strongest and back at the consolidation zone, while the IWM and QQQ still have a lot of work to do to remove the intermediate term downward bias. Use this information as you prepare for the coming week and trad’em well.
Disclosure: 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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