SPY Trends: Consolidation In The Uptrend, With Caution

Last week’s review of the macro market indicators suggested, heading into the shortened Holiday week, the markets looked healthy. In the next week we looked for Gold (GLD) to continue lower while Crude Oil (USO) consolidated and might reverse higher. The US Dollar Index (UUP) remained biased to the upside while US Treasuries (TLT) were biased lower. The Shanghai Composite (SSEC) and Emerging Markets (EEM) were biased to the upside with risk of Emerging Markets running in place. Volatility (VIX) looked to remain subdued keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. All continued to look better to the upside but the IWM looked the strongest of the Index ETF’s with the SPY and QQQ raising some caution flags on the weekly charts.
 
The week played out with Gold trading in a tight range while Crude Oil drifted making a lower low in its range. The US Dollar was steady with a slight drift lower low to end the week while Treasuries rose but met resistance at a lower high. The Shanghai Composite is starting to break higher and Emerging Markets bounced but remained little changed. Volatility made a strong move higher, but remains at very low levels. The Equity Index ETF’s moved higher with the SPY just in a slow drift while the IWM, making new all-time highs, and the QQQ, new 13 year highs, were stronger upside moves. What does this mean for the coming week? Lets look at some charts.

SPY Daily, (SPY)

SPY Weekly, (SPY)


The SPY started the week higher but could not complete the 3 Advancing White Soldiers pattern Monday. It moved sideways with a slight upward drift from there and ended the week a tad higher, at a new all-time high. The week looks like a consolidation zone again after a small move higher. The daily chart shows the RSI running flat in bullish territory just under the 70 level with a MACD that is also flat. The SMA’s are spread out and rising and the Bollinger bands are opening. These all confirm the trend higher. The weekly chart printed a doji for this week with falling volume. It has a RSI that is level in the low 70′s, technically overbought but not extreme, and a MACD that is rising. The picture on this timeframe is cautiously bullish. There is no resistance higher and a Measured Move to 182.39 nearby with another to 187.50 after that. Support lower comes at 180.40 and 178.50 followed by 177.65. Consolidation in the Uptrend With Caution.
 
As December begins the markets are still strong but getting a bit extended on longer timeframes. Look for Gold to consolidate or continue lower in the downtrend while Crude Oil is biased lower but also may consolidate. The US Dollar Index seems content to move lower in the short term in the uptrend while US Treasuries are biased lower but nearing support. The Shanghai Composite and Emerging Markets are biased to the upside with a chance of Emerging Markets running in place. Volatility looks to remain low and may drift higher keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ, but not as strong a breeze as has been blowing. Their charts show the IWM the strongest and the QQQ not far behind but a bit extended while the SPY shows the most signs of a stall or pullback. Use this information as you prepare for the coming week and trad’em well.

Disclosure: 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.

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