Last week’s review of the macro market indicators saw the worst first week of the New Year ever. Heading into January options expiration there really did not look to be any relief in sight for the equity markets. Elsewhere looked for gold to continue the bounce higher in its downtrend while crude oil burned lower. The US dollar index looked to continue consolidation at its highs while US Treasuries were biased higher in consolidation. The Shanghai Composite and Emerging Markets were biased to the downside and looking really ugly.
Volatility looked to remain elevated keeping the bias lower for the equity index ETFs N:SPY, N:IWM and O:QQQ. Their charts also pointed lower with perhaps a pause or oversold bounce in the short run, but with their intermediate term charts moving decidedly more bearish. The one possible exception was the QQQ which remained somewhat above the August lows.
The week played out with gold finding resistance and drifting slightly lower while crude oil dove lower. The US dollar maintained near its highs while Treasuries broke consolidation to the upside. The Shanghai Composite continued the 2016 steady march lower while Emerging Markets consolidated at the low. Volatility continued to be mildly elevated until it popped Friday.
The Equity Index ETFs all responded by heading lower on the week, after a failed attempt at consolidation early on. The IWM is more than 20% off its high and under the August lows, with the SPY approaching the August low and down over 12% and the QQQ down 15% but still holding above the August and September lows.
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