The US dollar index was biased lower in the short term in its uptrend, while US Treasuries looked lower in the broad consolidation. The Shanghai Composite looked better to the upside but with resistance nearby while Emerging Markets were biased to the downside. Volatility looked to remain subdued, keeping the bias higher for the equity index ETFs N:SPY, N:IWM and O:QQQ.
Short term the QQQ looked best and ready to challenge the all-time high, while the SPY and IWM lagged. Longer term they were all at prior consolidation areas and needed a catalyst. After a week where the ECB disappointed, the FOMC was pushing hard with rhetoric it will tighten, that the equity indexes did not crater was viewed as strength.
The week played out with gold probing lower before rebounding to end the week slightly down, while crude oil continued lower to new 7 year lows. The US dollar ended its bounce and moved lower, while Treasuries consolidated before moving higher Friday. The Shanghai Composite fell lower while Emerging Markets crashed and burned to back to the September lows.
Volatility fell to the bottom of the range to start the week but then moved steadily higher. The Equity Index ETFs all came into the week in consolidation ranges, but moved lower all week. The SPY made a new 2 month intraday low, and the IWM touched into the October gap, while the QQQ broke its consolidation range.
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