Friday, July 16, 2010

From the Charts: Macro Week in Review/Preview 7-16-2010

Going into this week I was looking for a range bound week for equities with a bias to the top of the range. Gold and Oil also appeared to be in a range, but the dollar index looked weaker and to be heading lower. Volatility measured by the VIX was in a tight range last week and looked to continue that way. The equity ETFs used here as a proxy did end up testing the top of their ranges and gave it all back with a vengeance today. Gold is still consolidating and the Oil has now flipped to a range on the upside of the 20SMA line that was the top of the range last week. The dollar index moved as expected, lower still. Finally the VIX held in a tight range. Lets look at the details:

Gold Daily

Gold Weekly

Looks Lower in the near term 1175. Despite big move today, Gold is still in a flag with the weekly channel bottom as support, at 1192 right now. On the daily charts the 20day SMA is about to cross the 50 SMA moving down which will increase the downward bias, adding some spice to the mix. This cross is also resistance at about 1220. Below the 1192 channel bottom next support is at 1175 then 1160.

West Texas Intermediate Crude Daily

West Texas Intermediate Crude Weekly

WTIC behaved well this week. Mid week jumped the 20SMA on the daily and has held, establishing a new range 76 - 82 range, with 78.89 also resistance in the middle. The weekly chart shows that the three weekly SMA 20/50/200 are all tightly intertwined and acting as resistance above between 76.27 and 78.51. This suggests that if it does get through 78.51 it will stay in the upper half of the range. Support on a failure is 74.50 from the daily chart and then 71.19 from the weekly.

US Dollar Index Daily

US Dollar Index Weekly

The US dollar Index has been having a rough ride lately and continued this week. The daily chart found support for a nanosecond at the 100SMA and then fell out of bed Thursday. Today's candle a hammer though suggest the fall may be over and ready to reverse. It needs confirmation though and teh potential exists in the weekly, although it is a harder case to make. The weekly looks ugly, but is at the same support level, around 82.25 as the daily. Both charts show support below at 81.36-81.70. Should it reverse look for 83.41 as first resistance.

VIX Daily

VIX Weekly

The VIX is creeping higher off of strong support in both the daily and weekly charts in the 23.4-24.25 and 24 - 25.60 areas respectively. The weekly shows a declining trendline since the beginning of June that may halt an up move. otherwise the next resistance area is 28 where there has been some battles recently on the daily and weekly charts.

SPY 60 Min

SPY Daily

SPY Weekly

The SPY has room to move lower. The short term 60 minute chart, when reviewed in the context of where the SPY is currently reveals some interesting things. Sitting near the 100 minute SMA at 106.23 there has been support at several instances near 106-106.09 and resistance near 106.84 -107.5. this is interesting because it seems to confirm that the SPY has fallen out of the 107.25-110.53 range from the daily chart. The daily chart adds further downside bias as it has broken through the 20 day SMA but shows lower support at 105 then 104.38 area and resistance on the 50SMA and down trend line both near 109. Both support and resistance levels are confirmed in the weekly chart.

IWM Daily

IWM Weekly

The daily chart shows IWM has fallen of the box I have been using to show a consolidation area from 2008. The next support below is 58.5-59. I will need to zoom out again next week. The weekly is a stronger indicator that IWM will continue down. It has failed to take the 50wk SMA and showing consecutive inside weeks with additional support below at 56.09. Resistance is at 62.80, and then 63.50 from the daily and then 64.74 from the weekly.

QQQQ Daily

QQQQ Weekly

The Q's had a very strong down candle today through the 20/50/200 SMAs, Oh my! The weekly long legged almost evening star-like candle halted right at the 50wk SMA. The daily shows support below at 43.50 and the weekly at 42.78 with both adding support at 42.50 area. 45.50 - 45.70 seems to be resistance above.

That is it for the broad market. Looks lower next week for equities and gold. Oil seems to be doing better. Watch the dollar index for signs of a bounce otherwise room below. I will post some individual names this weekend and Top 10 Ideas Sunday. Have a great weekend!

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