Last week’s review of the macro market indicators suggested heading into September Options Expiration the series of higher lows on the short term charts were showing some promise for equities. Elsewhere looked for gold to continue lower while Crude Oil consolidated building a bull flag. The US dollar index was also consolidating with a short term downward bias while US Treasuries were biased lower. The Shanghai Composite and Emerging Markets looked to continue their consolidation with a bias lower. Volatility looked to remain elevated but continuing the leak lower, with a possibility of a reversion to normal levels soon. This would lighten the bias lower for the equity index ETF’s SPDR S&P 500 (NYSE:SPY), iShares Russell 2000 (NYSE:IWM), and PowerShares QQQ Trust Series 1 (NASDAQ:QQQ), and work toward no bias. The ETF’s themselves were showing short term consolidation with reversal signs after a plunge. But the move out of consolidation could be in either direction so a wait and see approach with an upward short term bias was my view. Longer term a break of consolidation to the upside would be quite bullish. The QQQ remained the strongest of the indexes with the IWM and SPY showing bigger risk to the downside.
The week played out with gold starting lower before finding support and rebounding to end the week up while crude oil broke the bull flag to the upside but that failed. The US dollar started to the upside but then faded to end lower while Treasuries moved lower before a post Fed rally. The Shanghai Composite continued its month long consolidation while Emerging Markets pushed higher before some profit taking to end the week. Volatility continued the drift lower with a slight bounce to end the week. The Equity Index ETF’s all started the week moving higher but fell hard after the Fed announcement, with the SPY and QQQ giving back all of the gains, and only the the IWM finishing positive on the week. What does this mean for the coming week? Lets look at some charts.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.