Last week’s review of the macro market indicators suggested heading into the shortened Christmas week that the equity markets looked weak in the short term with the SPDR S&P 500 (N:SPY) weak in the intermediate term as well. Elsewhere watching gold for a bounce in its downtrend while crude oil continued lower. The US dollar index looked strong and ready for more upside while US Treasuries were mired in broad consolidation.
The Shanghai Composite was biased higher in consolidation and Emerging Markets were biased to the downside. Volatility looked to remain elevated keeping the bias lower for the equity index ETF’s SPY, iShares Russell 2000 (N:IWM) and PowerShares QQQ Trust Series 1 (O:QQQ). Their charts concurred on the daily feed after back-to-back strong down days, while the IWM and QQQ were nearing support in prior consolidation channels on the intermediate view. The SPY looked to be weaker, rolling lower on the longer view.
The week played out with gold pressing up to resistance while crude oil started lower but quickly found support and bounced. The US dollar moved slightly lower while Treasuries found overhead resistance and pulled back. The Shanghai composite continued higher while Emerging Markets made a higher low, rising through the week. Volatility fell back to a more normal range, easing the headwinds to the market. The Equity Index ETF’s all started the week with firming action then ran higher into the Christmas Eve close. What does this mean for the coming week? Lets look at some charts.
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