Last week’s review of the macro market indicators suggested, heading into a shortened February Options Expiration week the equity markets looked strong, breaking long consolidations to the upside. Elsewhere looked for Gold to continue lower in the short term in the longer consolidation while Crude Oil consolidated, and might be ready to reverse higher. The US Dollar Index looked to continue in a consolidation range while US Treasuries were biased lower. The Shanghai Composite looked to continue to pullback in the uptrend and Emerging Markets looked to hold in the bear flag, and might prove it a reversal higher. Volatility looked to remain subdued and drifting lower, 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 all looked strong on both the daily and weekly timeframes. If you had to pick a weakness then the gaps in the QQQ chart and move out of the Bollinger Bands® might signal short term exhaustion not seen in the SPY and IWM.
The week played out with Gold pushing lower to 1200 while Crude Oil showed it is not yet ready for a rebound. The US dollar continued to consolidate while Treasuries found support and are cling to it. The Shanghai Composite continued the rebound higher in a very short week while Emerging Markets consolidated their move over the 20 day SMA. Volatility made an attempt higher but was smacked back quickly to finish at 2015 lows. The Equity Index ETF’s started the week new highs. After some settling in they ended the week with yet another new high. What does this mean for the coming week? Lets look at some charts.