Last week’s review of the macro market indicators suggested, heading into May that the equity markets continued to look better on the longer timeframe but a bit shakier on the shorter timeframe. Elsewhere looked for gold to consolidate with a downward bias while crude oil continued higher. The US dollar had pulled back to a critical level where a reversal could be expected but more downside indicating a character change while US Treasuries continued to be biased lower. The Shanghai Composite might finally be consolidating in its uptrend while Emerging Markets were showing some downside risk due to a wider consolidation. Volatility looked to remain subdued keeping the bias higher for the equity index ETF’s SPDR S&P 500 (ARCA:SPY), iShares Russell 2000 (ARCA:IWM) and PowerShares QQQ Trust Series 1 (NASDAQ:QQQ). Their charts looked a bit vulnerable in the short term despite the support and moves higher Friday, with the IWM the weakest and the SPY and QQQ in consolidation zones. The QQQ chart looked the best on the longer timeframe.
The week played out with gold pushing higher initially in a bear flag before falling back while Crude oil started higher but met resistance and pulled back to about even on the week. The US dollar moved slightly higher early but also reversed ending lower on the week while Treasuries made a lower low before a slight bounce. The Shanghai Composite pulled back all week into it found a bid Friday while Emerging Markets moved similarly. Volatility spiked up through its SMA’s but fell back by week’s end. The Equity Index ETF’s started the week and their highs and then immediately moved lower. But all recovered well Friday with the SPY and the IWM making up all of the downturn and the QQQ the recovering most of it. What does this mean for the coming week? Lets look at some charts.
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