Last week’s review of the macro market indicators, heading into the February Operations Expiration Week and moving past February Options Expiration, saw the equity markets showing some strength in the week but also with a need for more upside before starting to talk about a reversal.
Elsewhere looked for gold to consolidate in its recent uptrend while crude oil turned lower in the consolidation zone in its downtrend. The US dollar index looked better to the downside in its broad consolidation while US treasuries were biased lower short term in the uptrend. The Shanghai Composite looked to continue the slow move higher in the downtrend and emerging markets looked to consolidate their move up in their downtrend.
Volatility looked to remain elevated but biased to the downside, starting to ease the bias lower for the equity index ETFs SPDR S&P 500 (N:SPY), iShares Russell 2000 (N:IWM) and PowerShares QQQ Trust Series 1 (O:QQQ). Their charts all showed short-term digestion of the large moves higher and possible exhaustion short term, which could resume the downward path.
The week played out with gold probing higher and lower but spending the week moving sideways, while crude oil bumped higher and held. The US dollar also bucked the trend (pun intended) and moved higher while treasuries made a lower high and pulled back. The Shanghai Composite crept higher but then crapped the bed Friday while Emerging Markets bounced around in a tight range.
Volatility started higher but then reversed to the low point of the year. The equity index ETF’s started the week higher but got whacked Wednesday before a massive reversal to end the week higher. The SPY and IWM broke out out of the 2016 range to the upside while the QQQ is close but lagging slightly behind. What does this mean for the coming week? Lets look at some charts.
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