Last week’s review of the macro market indicators which heading into the February Operations Expiration Week, saw the equity markets came in with a weak move lower and then consolidation and ended with a promise last Friday. Elsewhere gold looked overdone to the upside and ready for a pullback while crude oil bounced in the downtrend.
The US dollar index had short term strength in the downturn while US Treasuries might be overdone to the upside and ready to pullback. The Shanghai Composite was back after a week off and looked to consolidate while Emerging Markets consolidated in their downtrend. Volatility looked to remain elevated keeping the bias lower for the equity index ETFs N:SPY, N:IWM and O:QQQ. Their charts showed possible reversals higher in the downtrend in the short run, but intermediate weakness remained.
The week played out with gold pulling back but finding support and rebounding while crude oil continued higher but then gave some ground back Friday. The US dollar moved slightly higher while Treasuries continued lower but found support and bounced into the weekend. The Shanghai Composite found some strength after a week off while Emerging Markets moved higher.
Volatility melted lower all week but remained elevated. The Equity Index ETFs all started the week well then consolidated at the end of the week, leaving some open gaps below. The positive moves have yet to make a higher high though and break 2016 ranges.
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