A weekly excerpt from the Macro Review analysis sent to subscribers on 10 markets and two timeframes.
Last week’s review of the macro market indicators suggested, heading into the last full week of June and kick off into Summer, that the equity markets looked strong. Elsewhere looked for Gold (SPDR Gold Trust (ARCA:GLD)) to continue higher while Crude Oil (US Oil Sands Inc (TO:USO)) joined it to the upside. The US Dollar Index (PowerShares db USD Index Bullish (NYSE:UUP)) had a short term downward bias while US Treasuries (iShares Barclays 20+ Year Treasury (ARCA:TLT)) consolidated but also were biased lower. The Shanghai Composite (Shanghai Composite) looked like it had more consolidation in store for it while Emerging Markets (iShares MSCI Emerging Markets (ARCA:EEM)) were biased to the upside with possible consolidation. Volatility (Volatility S&P 500) looked to remain very low keeping the bias higher 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 were also biased to move higher on the longer timeframe with the shorter timeframe strongest in the IWM and with the SPY and QQQ looking like they could consolidate in the short term.
The week saw Gold flatline at 1320 while Crude Oil consolidated in a narrow range, neither with any energy. The US Dollar stayed in a narrow range as well, as it drifted lower while Treasuries started higher out of consolidation. The Shanghai Composite did continue to consolidate sideways while Emerging Markets could not move higher and also continued to consolidate. Volatility made a move higher, but only to just over 12 and held that for a nanosecond. The Equity Index ETF’s moved mainly sideways, with the SPY and IWM starting slightly lower before holding, and the QQQ the best performer drifting higher out of consoldation. What does this mean for the coming week? Lets look at some charts.
SPY Daily, SPY
SPY Weekly, SPY
The SPY started the week continuing the consolidation of last week’s move before pulling back to the 20 day SMA. It was not a long fall and it found support at the 20 day SMA riding it up slowly the rest of the week. The price action made a higher low after a higher high again, continuing the uptrend. The RSI on the daily chart held in the bullish range, and the lower low creates a Positive RSI Reversal, with a target of 197.62. This is near the Measured Move of 197.30 from the last leg higher. The Bollinger Bands ® are tightening foreboding a move, and the MACD continues lower, supporting downside. Kind of a mixed bag, so maybe just sideways for a little bit. The weekly chart shows a doji and a 3rd consecutive narrower range week. On this timeframe the RSI is strong and bullish with the MACD rising. These support more upside. There is a second Measured Move above the 197.30 at 202.50 and the round number 200 in between, all places where it could stall. Support lower may come at 194 and 193 followed by 190.40. Possible Consolidation in the Uptrend.
Monday closes the 2nd Quarter and we head into July with the equity market still looking strong. Elsewhere look for Gold to continue in its uptrend while Crude Oil may continue to consolidate in its uptrend. The US Dollar Index is in another short term downtrend while US Treasuries are biased higher, but may need a very short pullback first. The Shanghai Composite continues to grind sideways with Emerging Markets pulling back or consolidating in their uptrend. Volatility looks to remain minuscule keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts show that the SPY and IWM gained some strength to end the week but are still in a range while the QQQ is rising and very strong. Use this information as you prepare for the coming week and trad’em well.
Disclosure: 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.