Last week’s review of the macro market indicators suggested, heading into the last week of July, that the equity markets were a bit weaker, but mixed with the tech names, the strongest. Elsewhere looked for gold to continue lower along with crude oil. The US dollar index might move sideways or continue higher, while US Treasuries were biased to the upside. The Shanghai Composite was looking stronger and had almost dispelled all possibility of a Dead Cat Bounce, while Emerging Markets were confirming the resumption of the move lower. Volatility looked to remain subdued, keeping the bias higher for the equity index ETF’s ARCA:SPY, ARCA:IWM and NASDAQ:QQQ. Their charts were a bit mixed, with all better on the longer timeframe. The QQQ was the leader on the weekly timeframe, with the IWM next, and then the SPY. On the shorter timeframe, the QQQ’s were also looking the strongest, with the SPY and IWM worse, but all biased lower short term.
The week played out with gold holding in a tight range under 1100, while crude oil tried to bounce but could not hold it and fell back late in the week. The US dollar started lower, but recovered by week’s end, while Treasuries moved higher, ending at the resistance since May. The Shanghai Composite took another stab lower, but held above the 200 day SMA, while Emerging Markets consolidated at the lows. Volatility spiked on Monday, but fell back and ended at the lows of last week. The Equity Index ETF’s all found a bottom on the volatility spike Monday and rose through the week. All gave back a bit on Friday, but the IWM starting higher first and the SPY and QQQ from flat.
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