Last week’s review of the macro market indicators suggested, heading into the week that the equity markets were coming off of a good rebound higher but showed signs of exhaustion Friday. Elsewhere Gold looked to continue to pullback while Crude Oil tried to move higher off of a bottom. The US Dollar Index might continue to consolidate the rise, pulling back mildly, while US Treasuries were biased lower in their uptrend. The Shanghai Composite looked to continue its pullback from a major run higher and Emerging Markets continued to consolidate in a bear flag in their downtrend. Volatility looked to remain low but slowly rising slowing the wind behind equities to move higher. The equity index ETF’s SPDR S&P 500 (ARCA:SPY), iShares Russell 2000 Index (ARCA:IWM) and PowerShares QQQ (NASDAQ:QQQ), were all in a consolidation pattern in the intermediate term, despite the moves higher last week. The IWM looked the strongest and ready to test the all-time highs this week while the SPY was close behind but the QQQ a bit weaker.
The week played out with Gold continuing lower before a small bounce Friday while Crude Oil held another test of support in its bull flag. The US dollar did continue the sideways consolidation while Treasuries continued down to new 6 week lows. The Shanghai Composite reversed back higher, in what could be a bear flag, while Emerging Markets looked messy in a tight range. Volatility made a new 2015 low as it neared a critical level. The Equity Index ETF’s saw this as good news, with the SPY and IWM making new all-time closing highs and the QQQ 14 year highs.
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