Dragonfly Capital | Oct 12, 2013 04:19PM ET
Last week’s review of the macro market indicators suggested, as the 4th Quarter and earnings season began there was no additional clarity in the equity markets. It looked like Gold (GLD) would continue lower while Crude Oil (USO) rose in the short pullback. The US Dollar Index (UUP) looked to continue lower while US Treasuries (TLT) consolidated with a downward short term bias. The Shanghai Composite (SSEC) was poised to move lower and Emerging Markets (EEM) were biased to the upside now. Volatility (VIX) looked to remain low but drift higher although still in an area that was beneficial for the equity index ETF’s SPY, IWM and QQQ. Their charts showed that the QQQ and IWM remained strong and consolidating in bull flags or channels, while the pullback in the SPY might be over.
The week played out with Gold drifting higher before ripping lower to end the week while Crude Oil moved down to test the lows of last week. The US Dollar found support and started a bounce while Treasuries teased both sides of the trade ending little changed. The Shanghai Composite continued to stick like glue to the 200 day Simple Moving Average (SMA) while Emerging Markets moved higher. There was a spike in Volatility but the week ended lower than where it began. The Equity Index ETF’s found support just under key moving averages and reversed with the IWM and SPY ending the week higher. What does this mean for the coming week? Lets look at some charts.
SPY Daily, SPY
Moving into the October Options Expiration week, look for Gold and Crude Oil to continue to move lower. The US Dollar Index looks to continue higher in the down trend while US Treasuries consolidate but are biased lower. The Shanghai Composite and Emerging Markets are both biased to the upside in the short term. Volatility looks to remain low and falling again keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts also look higher with the IWM and QQQ near their highs but the SPY needing a little more to get there. 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 Original post
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