Last week’s review of the macro market indicators suggested, heading into February the equity markets looked biased to the downside to start the month. Elsewhere looked for Gold to continue to consolidate in the short term uptrend while Crude Oil was ready for a bounce or reversal in the downtrend. The US Dollar Index seemed ready to consolidate sideways in the uptrend while US Treasuries continued to be biased higher. The Shanghai Composite was also consolidating in its uptrend while Emerging Markets looked to have failed in their attempt to rally and were biased to the downside. Volatility looked to remain low but drifting up easing the wind behind the equity markets to a light breeze. The equity index ETF’s SPDR S&P 500 (ARCA:SPY), iShares Russell 2000 Index (ARCA:IWM) and PowerShares QQQ (NASDAQ:QQQ), all saw risk to the downside in both the daily and weekly charts with the QQQ the strongest on the longer timeframe followed by the IWM and then the SPY, but the iShares Russell 2000 Index (ARCA:IWM)possibly a bit stronger on the short timeframe over both the QQQ and SPY.
The week played out with Gold drifting lower in consolidation before falling to end the week while Crude Oil started higher. The US Dollar Index consolidated all week in a slight downward path while Treasuries pulled back all week from the new high. The Shanghai Composite continued to pullback from the highs, consolidating the big move, while Emerging Markets tried to rally again and failed. Volatility pulled back from the high but remained above the range of move of 2014. The Equity Index ETF’s all bottomed on Monday and moved higher the rest of the week with the SPY and IWM making higher highs but the QQQ lagging. What does this mean for the coming week? Lets look at some charts.
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