Last week’s review of the macro market indicators suggested, as the calendar turned to October the equity markets looked to have weathered a pullback, but were still not totally out of trouble. Elsewhere looked for Gold and Crude Oil to continue their pullbacks. The US Dollar Index and US Treasuries looked to continue to move higher. The Shanghai Composite was strong and looked good for more upside while and Emerging Markets were biased to the downside with the possibility of a bounce. Volatility looked to remain subdued, 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 printed short term reversals higher, but looked weaker on the longer timeframe. Play the reversals with caution for the week. Use this information as you prepare for the coming week and trad’em well.
“Play the reversals with caution for the week”. That was an understatement. The week played out with Gold probing lower and finding support at 1200 before rebounding to end the week up while Crude Oil just kept falling. The US Dollar finally found some resistance and pulled back while Treasuries marched higher. The Shanghai Composite continued its move up while Emerging Markets had a bounce, but of the dead cat variety. Volatility moved up and spiked to a key level before pulling in. The Equity Index ETF’s probed higher early Monday but then resumed their moves lower, with the SPY and the QQQ making 2 month lows, while the IWM a new 52 week low. What does this mean for the coming week? Lets look at some charts.
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