SPY Trends And Influencers: December 15, 2012

Last week’s review of the macro market indicators suggested, heading into the week that the markets were slowing but positive. Gold (GLD) looked to consolidate the latest move lower while Crude Oil (USO) joined it to the downside. The US Dollar Index (UUP) was bouncing higher while US Treasurys (TLT) were set up to move lower or consolidate.

The Shanghai Composite (SSEC) and Emerging Markets (EEM) were biased to the upside with the Chinese market doing so in a downtrend while Emerging Markets were gaining strength. Volatility (VIX) looked to remain subdued keeping the bias higher for the equity index ETF’s SPY, IWM, QQQ. The SPY and IWM seemed strong while the QQQ was the weakest of the 3 and should be the one to watch on a rollover.

The week played out with Gold trading in a tight range around 1700 while Crude Oil held its recent range. The US dollar found a top and pulled back while Treasuries moved lower. The Shanghai Composite continued its move higher putting an exclamation point on the end of the week with Emerging Markets continuing their gains. Volatility remained subdued and in a tight range. The Equity Index ETF’s peaked with the SPY and QQQ probed higher before pulling back form their midweek highs. What does this mean for the coming week? Let's look at some charts.

SPY Daily SPY

SPY Weekly SPY

The SPY moved higher early in the week before printing a Solid Black Evening Star that confirmed and sent it lower to end the week. The Morning Star Friday, over the confluence of the 20, 50 and 100-day Simple Moving Averages (SMA) gives hope for a run higher into the Christmas break. The daily chart shows a Relative Strength Index (RSI) that is pulling back from a higher high but over the mid-line with a Moving Average Convergence Divergence indicator (MACD) that is positive but fading.

On the weekly view it printed a Shooting Star at the rising trend line with a RSI that is rising and in bullish territory and a MACD that is negative but improving. The 50 week SMA has been important and the previous upside moves suggest a 157 target. Resistance is found higher at 144.44 and 147 before that comes into play. Support lower is found at 142 and 139.80 followed by 138 and 135.

Short-Term Consolidation or Pullback in the Uptrend.
Heading into the last full week of the year, there is still a bit of a cloud over the markets. Gold is biased lower within the long term neutral trend, with Crude Oil looking steady with a bias to the downside on a move out of the range. The US Dollar Index is biased to the downside if it breaks the tight range with US Treasuries looking lower in the uptrend.

The Shanghai Composite is looking strong in the downtrend with Emerging Markets strong but perhaps ready for a rest. The Volatility Index is showing no fear anytime soon keeping the bias higher for the Equity Index ETF’s SPY, IWM and QQQ. Their charts show some caution if not a pullback coming with the QQQ biased lower and weakest. Use this information as you prepare for the coming week and trade’m well.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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