Last week’s review of the macro market indicators suggested, heading into the last week of January, that the equity markets were churning, but at different paces. Elsewhere looked for Gold to continue in its uptrend while Crude Oil continued lower. The US Dollar Index also looked to continue higher while US Treasuries consolidated in the uptrend. The Shanghai Composite was taking a breather in its uptrend but Emerging Markets were breaking higher, at least in the short term. Volatility looked to remain low but drifting gently higher over time slowing the wind at the back of the equity market. The equity index ETF’s were reacting differently to these factors. The iShares Russell 2000 Index (ARCA:IWM) was continuing its consolidation but with signs it may break higher, while the SPDR S&P 500 (ARCA:SPY) consolidated in its uptrend, perhaps passing the baton to the small caps. The PowerShares QQQ (NASDAQ:QQQ) was been acting mostly like the SPY but looked much stronger, with a possible break of a bull flag higher brewing.
The week played out with Gold finding resistance at 1300 again and pulling back while Crude Oil continued to leak lower until a massive rebounded late in the week. The US dollar consolidated its move until late in the week it moved back higher higher while Treasuries made a new all-time high. The Shanghai Composite tested resistance again and pulled back slightly while Emerging Markets held higher over support early only to give it up at the end of the week. Volatility moved back higher ending the week at the highs, but below the prior high. The Equity Index ETF’s all pulled back in their recent consolidation zones, leaving Monday as the high of the week. What does this mean for the coming week? Lets look at some charts.
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