Last week’s review of the macro market indicators suggested, heading into another holiday shortened week, that the equity markets still looked a bit vulnerable to more pullback. Elsewhere looked for gold to continue its uptrend while crude oil consolidated in the downtrend. The US dollar index looked to continue higher along with US Treasuries. The Shanghai Composite looked to resume its move higher despite being very overbought while Emerging Markets continued to consolidate in a bear flag in the downtrend. Volatility looked to remain low but creeping higher making a headwind for the equity index ETF’s SPDR S&P 500 (ARCA:SPY), iShares Russell 2000 Index (ARCA:IWM) and PowerShares QQQ (NASDAQ:QQQ). Their charts showed differing reactions with the IWM consolidating in the top of its year long range, and the SPY trying to reverse a pullback, while the QQQ was biased lower in the short run. Longer term the SPY and QQQ remained in uptrends while the IWM consolidated.
The week played out with gold continuing higher to test 1300 for the first time in 5 months while crude oil continued to consolidate at the lows. The US dollar struck out to the upside again while Treasuries made new highs and then consolidated. The Shanghai Composite found a bottom in the pullback and revered to the highs while Emerging Markets finally broke above the resistance that held them for a month. Volatility continued to pullback from the latest spike but remained above the 200 day SMA. The Equity Index ETF’s reacted to the upside but at differing rates. While the IWM drifted up, the QQQ had a solid strong trend and the SPY trended too until pausing Friday. What does this mean for the coming week? Lets look at some charts.
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