Last week’s review of the macro market indicators with the books closed on the 1st Quarter, equity markets had a great 3 months but remained short of their all-time highs. Elsewhere looked for Gold ($GLD) to continue lower while Crude Oil ($USO) paused in its uptrend. The US Dollar Index ($DXY) looked to move up in the broad consolidation while US Treasuries ($TLT) were breaking higher.
The Shanghai Composite ($ASHR) and Emerging Markets ($EEM) were consolidating their gains. Volatility ($VXXB) looked to remain low easing pressure on the equity index ETF’s $SPY, $IWM and $QQQ. Their charts were mixed with the QQQ in a solid uptrend while the SPY consolidated sideways, with the IWM pulling back in a long bull flag.
The week played out with Gold hanging onto support just under the round number while Crude Oil moved over the 200 day moving average and consolidated. The US Dollar made a lower high and then reversed in consolidation while Treasuries were knocked back lower all week. The Shanghai Composite charged up to new 52 week highs while Emerging Markets are at 8 month highs.
Volatility is teetering on dropping below the teens to 6 month lows, keeping the bias higher for equities. The Equity Index ETF’s all gapped higher Monday and then again on Wednesday. With a third gap up Friday that held, the SPY and QQQ ended the week less than 3% from their all-time highs, with the IWM still facing some short term hurdles to get that close. What does this mean for the coming week? Let’s look at some charts.
SPY Daily, $SPY
The SPY had reversed off of a higher low and back over resistance as it came into the week. Monday saw it gap up and it continued higher all week. It ended the week less than 2% from its all-time high close and showing strength.
The daily chart shows the Bollinger Bands® opening to the upside as price moves out of consolidation. The RSI is also rising and strong in the bullish zone. It is now approaching overbought territory. The MACD is crossing back up and rising.
The weekly chart shows a strong move higher out of consolidation with the Bollinger Bands opening. The RSI is finally firmly in the bullish zone with the MACD rising and positive. There is resistance at 289.50 and 292 then 294. Support lower comes at 287 then 285 and 284 before 282 and 280. Uptrend.
SPY Weekly, $SPY
As the 2nd Quarter starts there was no sell off in equities, rather a gap and go week showing strength. Elsewhere look for Gold to continue to consolidate while Crude Oil remains in an uptrend. The US Dollar Index looks to mark time next week while US Treasuries pullback in their uptrend. The Shanghai Composite and Emerging Markets are back in their uptrends.
Volatility is very low and looks to continue there, keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts show the SPY and QQQ now looking like strong uptrends with the IWM turning up to join them. Use this information as you prepare for the coming week and trad’em well.
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