Last week’s review of the macro market indicators suggested that with October Options Expiration behind, the Equity Markets were looking stronger. Elsewhere looked for gold to pullback in the short term in its uptrend, while crude oil rose. The US dollar index was biased lower in consolidation, while US Treasuries had a short term bias higher in their consolidation. The Shanghai Composite and Emerging Markets were biased to the upside, with risk of the Emerging Markets hitting long term resistance. Volatility was back to the normal range and falling, putting the bias higher for the equity index ETFs N:SPY, N:IWM and O:QQQ. After strong back halves of the week, the SPY and QQQ looked as if they were ready to reverse the downward August trend and resume higher, while the IWM remained in a consolidation zone.
The week played out with gold drifting lower in its bull flag, while crude oil headed lower all week. The US dollar exploded higher late in the week, while Treasuries remained in a tight range. The Shanghai Composite continued to probe around the 3400 level, while Emerging Markets moved sideways around long term resistance. Volatility continued its move lower, making a new two month low. The Equity Index ETFs started the week in consolidation, but by the end of the week, they were moving higher, with the QQQ leading the charge out of consolidation and the SPY following, but the IWM stubbornly holding at the top of consolidation..
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