Last week’s review of the macro market indicators suggested, heading into the last full week of the year that the equity markets were seeing weakness. Elsewhere looked for Gold to continue its short term uptrend while Crude Oil continued the trend lower, but with perhaps a short term bounce. The US Dollar Index looked to move sideways in the uptrend while US Treasuries were biased higher. The Shanghai Composite was finally consolidating its strong move in the uptrend while Emerging Markets looked to continue their fall lower. Volatility looked to remain slightly elevated in the low zone keeping the short term bias lower for the equity index ETF’s SPDR S&P 500 (ARCA:SPY), iShares Russell 2000 Index (ARCA:IWM) and PowerShares QQQ (NASDAQ:QQQ). The SPY and QQQ looked weakest and had room to pullback more while the IWM was consolidating but at the bottom of the range, so also vulnerable.
The week played out with Gold losing its strength and falling back to 1200 while Crude Oil started lower but then consolidated most of the week. The US Dollar moved slightly higher to a new multi-year high while Treasuries made a new high before they pulled back. The Shanghai Composite resumed its push higher while Emerging Markets may have finally bottomed. Volatility spiked early in the week but pulled back quickly. The Equity Index ETF’s all started the week lower before bouncing and finishing strong. With the IWM at new 5 month highs and the SPY and the QQQ recovering most of their recent losses. What does this mean for the coming week? Lets look at some charts.
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