Friday, June 25, 2010

From the Charts:Macro Week in Review 6-25-2010

This week started with the highly anticipated free float of the Chinese Yuan that was supposed to put the US on better footing against our Asian neighbors (At least for you west coasters). My initial thought was why now? What is in it for China, outside of getting Timmy G. off their back at the upcoming G20 meeting? But my views on the economics of the situation are for another space, how did the market respond, in the charts.


Lets take a look:

GOLD Daily

GOLD Weekly

Looking at the daily chart it appears that only 1265 is left before 1300 can be taken. There is support below, at 1241. From the weekly chart we see a hanging man doji though indicating a possible pullback, but with support at 1225.

OIL Daily

OIL Weekly

The daily chart for West Texas Intermediate Crude shows a strong up move today that stalled right above the 100SMA. 82 looks to be the next resistance and 74.50 support below. Moving to the weekly shows that oil could not break the 20wk SMA though, which is resistance. and support below is at 70.50. Put the two together and it appears to be range bound.

US Dollar Index Daily

US Dollar Index Weekly

The Dollar index on the daily chart shows a range between 86.22 and 85.04 (the 50 SMA) with further upside resistance at 86.22. But the weekly paints another story. The morning star doji suggests a reversal higher is coming with 87 as first resistance and then 88.5.

On to equities.

Volatility Index, VIX, Daily

Volatility Index, VIX, Weekly

The VIX daily was an inside day, consolidating, but tested the 30 level again. It should get a push higher from a rising 50SMA. The weekly confirms a bullish bias with a engulfing candle. resistance above is next at 32.50. Support lower would be 25.37 on a break of 28.

SPY Daily

SPY Weekly

The daily SPY chart is in another down move with support now at eh 104.38 level. If something odd happens there is resistance above at 109.09, the downward trend line. On the weekly, this week was a big bearish engulfing candle which broke through the 50wk SMA. Look for a test of 106 on the way lower.

IWM Daily

IWM Weekly

The daily chart held the 200SMA after testing it so it is now support. On the weekly the bearish engulfing candle seems to point to 62.08as the goal. Both charts show upside resistance at about 66.80

QQQQ Daily

QQQQ Weekly

The Q's also retested the 200SMA at 45.05 and held. If it reacts like the other index ETF's it looks to go through and lower. Support below would be at 43.50, This is confirmed from the weekly chart. A bearish engulfing candle points lower with resistance above at 46.65.

So What Does It All Mean For Next Week?
For the first time in several weeks both the daily and the weekly charts for the Index ETF's both point lower. Also, each of the 3 ETF's outlined here are pointing lower in the future. This is a big change! I am mainly cash and have a handful of short options spreads. It will be hard for me to stalk a long trade for Monday based on what I see now. That is outside of gold and other precious metal related stocks. Perhaps you can pick up something quick in oil but there does not seem to be much upside there if at all. The dollar is still playing a big role as it looks to have found support. G20 will tell.

Good luck next week!

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