SPY Trends and Influencers June 22, 2019

Last week’s review of the macro market indicators saw heading into June options expiration that equity markets took a digestive breather after a strong move higher, but remained looking healthy on the longer timeframe. Elsewhere looked for Gold ($GLD) to continue in its uptrend while Crude Oil ($USO) continued to move lower. The US Dollar Index ($DXY) was now in a short term downtrend while US Treasuries ($TLT) continued to be biased higher.

The Shanghai Composite ($ASHR) and Emerging Markets ($EEM) were pulling back lower. Volatility ($VXXB) looked to remain low keeping the bias higher for the equity index ETF’s $SPY, $IWM and $QQQ. Their charts showed a loss of power and momentum in the short run but continued strength in the longer timeframe.

The week played out with Gold holding firm early before charging to 1400 late in the week while Crude Oil also made a big move to the upside late in the week and consolidated. The US Dollar marched lower while Treasuries probed higher but could not hold up. The Shanghai Composite had a strong week gaining over 100 points while Emerging Markets found support and reversed higher.

Volatility drifted lower in the teens, keeping the bias higher for equities. The Equity Index ETF’s were already moving higher when they reacted to the FOMC statement positively, with the SPY rising to new all-time highs and the QQQ within a few points of its prior top. The IWM continued to be the laggard, churning in a consolidation range. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY was consolidating just under its highs as the week started. It had just negated a Head and Shoulders pattern by moving over the right shoulder. It held there Monday and then started higher Tuesday with a gap up. Wednesday it held the move and made a small gain after the FOMC announcement. But Thursday saw another move up which it held Friday.

It made a new all-time high with the Thursday close but could not hold a new weekly high close Friday. The daily chart shows the Bollinger Bands® opening to allow more upside. The RSI is flat in the bullish zone with the MACD rising and positive. A real show of strength.

The weekly chart shows a strong move up from the doji last week. The RSI is rising and in the bullish zone with the MACD crossed back up and positive. There is resistance above at 295 and 296.25. Support below 294 comes at 292 and from 289.50 to 290.50 then 287 and 285. Uptrend.

SPY Weekly, $SPY

With June options expiration complete, equity markets are looking strong with 1 week left in the first half of the year. Elsewhere look for Gold to continue in its uptrend while Crude Oil joins it moving higher. The US Dollar Index looks to continue to retrench lower while US Treasuries pause in their uptrend. The Shanghai Composite looks to continue its reversal higher while Emerging Markets continue their short term uptrend.

Volatility looks to remain low keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts all show strength on the longer timeframe. On the shorter timeframe the small caps appear to be weaker than the others though. Use this information as you prepare for the coming week and trad’em well.

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.