SPY Trends and Influencers July 20, 2019

Last week’s review of the macro market indicators saw heading into July Options Expiration that the equity markets were gaining strength with the SPY and QQQ strong and at record highs. Elsewhere looked for Gold ($GLD) to continue to pause in its uptrend while Crude Oil ($USO) advanced higher. The US Dollar Index ($DXY) continued to move sideways in a broad range while US Treasuries ($TLT) pulled back in their uptrend.

The Shanghai Composite ($ASHR) looked to have reversed lower while Emerging Markets ($EEM) might be pausing or shifting to consolidation.  Volatility ($VXXB) looked to remain very low keeping the bias higher for the equity index ETF’s $SPY, $IWM and $QQQ. The SPY and QQQ were playing along with record highs and showing strength. The IWM, while not showing weakness, remained stuck in the range it has been in since February.

The week played out with Gold holding firm before a late week attempt to move higher while Crude Oil hit a wall and reversed lower. The US Dollar tightened its range around the 200 day SMA while Treasuries rebounded to the upside. The Shanghai Composite gathered support at lower levels while Emerging Markets marked time heading sideways.

Volatility held in a tight range in the low teens, keeping the bias higher for equities. The Equity Index ETF’s reacted in mixed fashion, with the QQQ and SPY rising to new all-time highs Monday before a small pullbacks. The IWM however remained stalled in the range holding it since February. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week strong and at an all-time high. It added a new all-time high close Monday but with weaker intraday price action. Tuesday saw a small move lower followed by deeper drop Wednesday. It rebounded Thursday and opened higher Friday. But Friday saw weak price action all day as the price retraced the entire Thursday gain.

It ended the week holding just over the 20 day SMA after a nasty Marubozu candle Friday. The daily chart shows the RSI resetting lower in the bullish zone with the MACD crossed down, also retrenching, but positive. The Bollinger Bands® have also shifted to be a bit flatter. Just a minor digestion for now.

The weekly chart shows the retracement of the prior week, but holding over the break out area. The RSI is turning lower in the bullish zone with the MACD flattening and positive. There is resistance higher at 298.80 and 299.75 then 301. Support lower comes at 296.75 and 295 then 294 and 292 before 290. Pause in Uptrend.

SPY Weekly, $SPY

The last week of Fed Speak and Options Expiration took a toll on equity markets as they suffered a down week. Elsewhere look for Gold to pause in its uptrend while Crude Oil drives lower. The US Dollar Index remains stuck in a sideways consolidation while US Treasuries are pausing in their uptrend. The Shanghai Composite and Emerging Markets look to be consolidating sideways, the Shanghai Composite after a pullback and Emerging Markets in an uptrend.

Volatility looks to low but drifting up keeping the bias slightly lower for the equity index ETF’s SPY, IWM and QQQ. Their charts all show consolidative pullbacks in the shorter time frame, with the SPY and QQQ showing no real damage, while the IWM continues to tread water. The SPY and QQQ look strong on the longer timeframe with the IWM continuing to sideways on this timeframe also. Use this information as you prepare for the coming week and trad’em well.

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