From the Charts: Macro Week in Review/Preview September 24, 2010

This week began looking to bring more new highs for Gold with US Treasury Bonds and the US Dollar Index set up to move lower. Oil looked like it may join them going lower as well. The relatively low volatility index looked like it would not impede stocks from moving higher but only the QQQQ's seemed ready to move with the SPY and IWM still scratching their heads about the next move. I detailed this in the broad market trend reviewed Friday September 17th. As the trading began Gold and the Dollar Index behaved as telegraphed from the charts with Oil stagnating but US Treasuries finding support and reversing higher. The QQQQ's jumped and dragged the SPY and IWM with them. Stocks then took a breather for 3 days and jumped again on Friday, very similar to a bullish rising three methods pattern, that we saw in the e-mini futures. What is in store for the markets next week? Let's look at the charts.


Gold Daily

Gold Weekly
Gold has been on a tear. Today it tagged 1300 and then pulled back slightly. It could rest here as the Relative Strength Index (RSI) is getting overbought. It still looks good for more upside from the clear uptrend channel on the weekly chart. 1345 looks to be the next resistance from a projection off of that weekly chart. Support can be found at 1270 and then 1255.

West Texas Intermediate Crude Daily

West Texas Intermediate Crude Weekly
West Texas Intermediate Crude has been caught in the tangle of the Simple Moving Averages (SMAs) which are acting as both resistance and support on the daily charts. The flat-lined Moving Average Convergence Divergence (MACD) and RSI right at 50 on both the daily and weekly charts indicate no clear trend, but the weekly chart shows a very slight up trend. When Oil gets clear of the SMA's it should make a nice move, the question now is when and which way.

US Dollar Index Daily

US Dollar Index Weekly
The US Dollar Index is having a horrible run as a result of the Treasury printing presses. This week the wounds reopened and the bleeding picked up. It is now through all major SMA's and looking for support at 79 with the next support lower at 78. Resistance (we can dream can't we?) can be found now at 79.50 and then 80. The weekly chart shows a very disturbing pick up in the negative MACD indicator this week making matters worse.

iShares Barclays 20+ Yr Treasury Bond Fund Daily

iShares Barclays 20+ Yr Treasury Bond Fund Weekly
US Treasuries, as proxied by TLT, seem to be drifting around. I redraw these lines more frequently than any other chart. It looks to be on support of the uptrend from April at 103.50 from the daily chart. Support below that would come at 102.50 and then lower at 102. Resistance can be found at 104.06 followed by 104.80. The RSI is right at 50 and the MACD can't make up it's mind either as it looks the slower and faster signals look like they are repelling each other as they come close to a cross. The weekly chart looks like it is losing the uptrend, barely, or perhaps filling the gap from 6 weeks ago before a run higher. Blowing in the wind.

VIX Daily

VIX Weekly
The Volatility Index has been in a range between 21.25 and 28.40 for nearly three months and looks to continue that way next week. All of the SMA's are within the range on the daily and most are looking like flat lines now, acting as resistance on the way to the top of the range.

SPY 60 minute

SPY Daily

SPY Weekly
The 60 minute chart on the SPY shows that it is now clear of a lot of the resistance and support areas from the past four months and can look to new higher levels if it can hold up. The daily chart shows a strong up move today that stopped right at the 114.84 area that was some support just after the May 6 flash crash. Above that are there is resistance at 116.50 and below is support at 112.61 and then 109.87. The RSI is pointing higher and the MACD is now increasing again. It looks higher. Switching to the weekly chart, the SPY cleared the 200 week SMA today at 114.69. here is a good uptrend developing and RSI and MACD are supporting further advancement. Resistance shows up at 118.50 and then 120.89 on the weekly.

IWM Daily

IWM Weekly
The daily chart of the IWM shows a strong move up to resistance at 67 today with further resistance at 67.50 and then 70 higher. Support can be found at 66 and lower at 65.50. This also looks to be headed higher with the MACD and RSI supporting the bull case. On the weekly chart IWM broke above the downtrend line now sees similar resistance levels as the daily at 67.60 and then 70. Support can be found on the weekly at 64.66 and then lower at 64.19. IWM is now above all of its major SMA's on both the daily and the weekly charts.

QQQQ Daily

QQQQ Weekly
The QQQQ's have been the beast of the equity indexes lately leading the bull charge, and the Three Advancing White Soldiers (actually four) on the weekly chart bode for more to come. Resistance on the daily chart shows up at 50 and then 50.4 higher. there is support at 49.10 and then 48.3 below. RSI is getting into the overbought range on the daily so it may rest and let the SPY and IWM catch up. But it appears the April highs are in sight very soon. This too is above all of its SMA's on both charts.

So next week looks to bring stronger prices for Gold again and more flogging of the US Dollar Index. US Treasury Bonds seem to change direction with changes in sentiment and Oil looks to be stagnating. The relatively low and stable volatility index combined with that weaker dollar create a fertile environment for stocks to continue higher. Good luck next week!

From the Charts: Macro Week in Review/Preview September 17, 2010

The week began looking like Gold and the US Dollar Index might take a breather. US Treasury Bonds were on support but looked weak and headed lower. Although Oil was strong it was nearing layers of resistance which could take some time to work through. Volatility seemed to have found a bottom, although still weak, which would allow stocks to continue their move higher, towards a test of the top of the four month (or maybe one year) channel. I detailed this in the broad market trend reviewed Friday September 10th. The week started with a bang as the equity index ETF's went right to resistance on Monday and stayed there all week, except for the QQQQ which did not stop and is trying to drag the others higher. Gold and the US Dollar Index did rest for a couple of days before Gold started higher but the dollar broke lower and Treasuries started to lose their range lower. Oil did test the top of resistance and was smacked back hard. How does this set up for next week? Let's look at the details in the charts.

Gold Daily

Gold Weekly
Gold took Monday off then rocketed up to new highs on Tuesday, rested again Wednesday and created higher highs ending the week. With this move it now has support at 1270 and then 1255 and 1247.79 below. The weekly chart shows a continued move within the long upward trending channel through the 1255 area and onward now to the target of 1328. The Relative Strength Index (RSI) is indicating that it is getting a little overbought so it might rest again, but the trend and momentum is still higher. It wants more. This is re-enforced by the rising Simple Moving Averages (SMA's) and the positive Moving Average Convergence Divergence (MACD) on both the daily and weekly charts, with special notice to the MACD cross on the weekly chart.

West Texas Intermediate Crude Daily

West Texas Intermediate Crude Weekly
West Texas Intermediate Crude does not seem to want to join the party. Despite entering the week with positive technicals it tested the 200 day SMA and then rejected lower, as noted above, through the 50 ad 100 SMA's. With a bearish engulfing candle Friday it is hanging on support of 74.70, the 20 day SMA , by a thread with support lower at 72, and it looks weak. Should it bounce there is resistance at 75 and then the 76.22-.72 area followed by 77.76. A lot to work through to get back where it was on Monday. The MACD and RSI have also turned lower suggesting its upward run may be ending. Switching to the weekly chart, the consolidation continues below the SMA's with the 20 week SMA adding a negative bias as it crosses lower. Below the flag there is support at 71.19 and then 70. Should it break the SMA's higher there is resistance at 81.50.

US Dollar Index Daily

US Dollar Index Weekly
Speaking of weak, the US Dollar Index is the poster child. It fell right out of the blocks Monday and took another beating Tuesday. Since then is has created a bear flag with support at 81 and then 80.70 followed by 80. The weekly chart shows that it lost support at 82.08 and 81.63, the 100 week SMA. Both will now act as resistance. The MACD and RSI on the weekly chart appear very bearish. Should it miraculously rise from the dead, there is resistance at 81.72-82 and then 82.28-.44.

iShares Barclays 20+ Yr Treasury Bond Fund Daily

iShares Barclays 20+ Yr Treasury Bond Fund Weekly
My proxy for US Treasuries, the TLT, lost support of the 50 day SMA at 101.98 on Thursday and could not reclaim it. The bearish action within the positive candle Friday is also a sign of weakness. There is resistance higher near 103 from the upward trendline and 104.80 higher. the increasingly negative MACD and falling RSI suggest it is heading lower. Continued weakness sees support at 100 followed by 98.92. The weekly chart paints a similar picture with no new knowledge of support or resistance but a couple of key indicators to watch for. Fist this week's candle was a star signifying indecision so be nimble enough to react to a possible reversal. The MACD however is crossing lower and a falling RSI bode for more downside.

VIX Daily

VIX Weekly
There is not much to say about the Volatility Index. It has been in a range on both the daily and weekly charts for several weeks now between 21.25 - 28.4. the SMA's on both charts provide some resistance if the VIX were to move higher. Under the range the daily chart shows support at 18 and the weekly at 16.93.

SPY 60 minute

SPY Daily

SPY Weekly
The 60 minute chart shows clearly that the SPY is testing the 113.20 area for the third time in four months. RSI is falling but still near 50 and the MACD looks stable on this chart. It could go either way. There is support lower at 112.13-22 and then 111.68, and resistance above at 114.67 from May. Switching to the daily chart this week was a 5 day island gap up and is sitting against resistance at 113.25. Should it break through the next resistance is at 114.55. The MACD indicator is decreasing and the RSI is rolling over indicating that there may be a move lower. If so, support can be found at 112 followed by 111.28 and 110. The weekly chart printed a Doji star, signaling indecision, at the 113.26 resistance area. There is further resistance above at 114.67 and 115.38, and further support below at 110.26 then 109.20. There does not appear to be real power in either direction.

IWM Daily

IWM Weekly
The daily chart for the IWM shows a 5 day consolidation range between 64.50 and 65.50. It is slightly bearish as the real bodies became smaller Thursday and Friday and the shadows longer. But it did hold above the bearish 100 day 200 day SMA cross.The MACD is positive but starting to decrease and the RSI is flat lined. If it gets through 65.50 then resistance can be found at 66.50 and 67.25 higher. Support comes first at 64.52 and then 63.29. On the weekly chart IWM is up against resistance from the downtrend line 65.21. Resistance on a breakthrough comes at 70 higher. The tight SMA's act as support below as well as 58.68. The weekly shows the MACD crossing higher and the RSI rising giving it a slight bullish bias. Taking both the daily and weekly charts into account there is not a clear bias in either direction here either.

QQQQ Daily

QQQQ Weekly
The QQQQ is the anomaly in the Index ETF space. It had a strong gap up move Monday and kept going. Have broken and held the long term support/resistance level near 47.80 it is now ready to test the 48.50 May highs with resistance above that at 50.10. The RSI is only approaching being overbought near 70 and the MACD is positive but may be waning. The one bearish glimpse is the solid black candle indicating a bearish day Friday with in the up move, starting at the high and closing lower, also creating a bearish Hanging Man. If it falls then support can be found at 47 and 45.75-.90 lower. The weekly chart shows it at resistance of 48 from September 2008 with 50.55 as resistance beyond that. The converging 20 and 50 week SMA's provide support lower and then 43.80 before the 200 week SMA at 42.51. If you had to pick one broad equity index ETF that is heading higher this would be the one. The weekly also shows an increasing MACD and rising RSI. At least one index knows where it wants to go.

So next week looks to bring more new highs for Gold. US Treasury Bonds and the US Dollar Index appear to be heading lower. Oil looks will probably join them going lower as well. The volatility index does not seem like it will impede stocks but only the QQQQ's seem to know that they want higher with the SPY and IWM still scratching their heads about the next move. Good luck next week and trade well!

From the Charts: Macro Week in Review/Preview September 10, 2010

We came into this holiday shortened week expecting stronger prices for Gold again. The US Dollar Index and US Treasury Bonds were poised to continue their moves lower. Oil was set up for a move higher but without much room before it runs into a wall of resistance. A relatively low volatility index was creating the environment for stocks to push higher, also without a lot of room before resistance. I detailed this in the broad market trend reviewed Friday September 3rd. The week started as expected...for Gold anyway and nothing else. The US Dollar Index and US Treasuries bounced, and Oil and stocks sold off Tuesday. After a little ping pong the week now ended as expected for all indicators except Gold which ended flat and the US Dollar Index which rose slightly. There are some changes in expectation for next week. Let's look at the charts.

Gold Daily

Gold Weekly
Gold raced up to test the 1255 resistance level and then pulled back to 1245 support on Thursday. The support level held on Friday but the Moving Average Convergence Divergence (MACD) is now crossing on the daily chart, indicating an open environment to pullback further. There is support at 1237, 1233 and 1220. the weekly chart looks like a glass ceiling at 1255 which it cannot crack. If it can there is resistance at 1328 higher. I still expect it to reach new highs, but it may pullback first.

West Texas Intermediate Crude Daily

West Texas Intermediate Crude Weekly
West Texas Intermediate Crude seems to be breaking out of the 3 week flag to the upside. I have noted in the past that if it did there is a lot of resistance from both the daily and weekly charts at the Simple Moving Average (SMA) levels above. Friday oil blew through he flag resistance at 75.80, now support, and stopped right at the 50/100 day SMA cross near 76.50. The weekly set of SMA's are also very near by now as resistance at 77.30-.82. There is resistance higher at 77.78 on the daily chart and support lower at 74.80-75. Above the bands of SMA's the weekly chart shows resistance at 81.50 and also adds support lower at 72 and then 71.19. I expect it might take some time to get through this resistance but expect a big pop if it happens quickly.

US Dollar Index Daily

US Dollar Index Weekly
The US Dollar Index popped to the 20/50 day SMA cross and held there all week. There is resistance higher at 83.50 and then 84 and support lower at 82 all from the daily chart. The flat MACD and RSI give no clue to a future move. The weekly chart shows the beginning of a flag forming above the 82.08 support level. It also shows resistance at 83 and then 84.01 higher and support at 81.64and then 80.58. There might be a slight bias to the upside from the weekly chart with the rising SMA's and hold of support.

iShares Barclays 20+ Yr Treasury Bond Fund Daily

iShares Barclays 20+ Yr Treasury Bond Fund Weekly
My proxy for US Treasury Bonds, the TLT, jumped up Tuesday and proceeded top fall the rest of the week. It ended the week holding support of the 101.77-102.10 area. There is support lower at 100 and then 98. If it catches a bounce resistance can be found at 104 followed by 104.8 and 106. The weekly chart filled the gap from early August and and looks to be headed lower. It adds 102 as a support level and resistance higher at 108. The trend is clearly lower now.

VIX Daily

VIX Weekly
The Volatility Index held support of the bottom of its channel at 21.80, barely. There is support lower at 18 from the daily chart and 16.93 from the weekly. If it continues to hold there is resistance at the 200, 50 and then 100 day SMA's on the way to 28.40 on the daily chart. On the weekly chart adds resistance at 23.88 then 26.09 and 28. It looks to test the bottom of both channels again.

SPY 60 minute

SPY Daily

SPY Weekly
Although the SPY looks to be heading to a test of the 113.20 channel top, the 60 minute chart exhibited a bearish divergence between the price action and the MACD this week. It does look like it may resolve shortly and did not show up in the RSI so it is just a point of note right now. The daily chart printed an Inside Day today, a sign of indecision, with 111.19 as support and then 110.27 and 109.40 lower. It shows resistance at 112 and then 113.20. the weekly chart adds to the picture with a bullish move above the 20/50 week SMA cross above 110. It adds a resistance point higher at 114.67 and support lower at 106 and then 104.35. There is more room still to the upside.

IWM Daily

IWM Weekly
IWM also had an indecisive Inside Day, finishing below resistance at 64.33 with 64.91 as resistance higher. There is support below at 62.83-63 and then 61.84 from the rising 50 day and 20 day SMA's, respectively. It looks good to go higher still. The weekly chart shows the range between the SMA's and 58.68 holding up with this week's candle squeezed by the 20, 50 and 200 week SMA's. There is resistance higher on the weekly chart at 67.50, and support lower at 61 before testing 58.68. The MACD on the weekly looks to be turning and crossing adding to the bull case.

QQQQ Daily

QQQQ Weekly
The Q's also had an Inside Day but well above the 100/200 day SMA cross. There is support at the 45.18-.25 area and then 44.50 below that. Resistance comes first at 46.75 and then 47.10 followed by 47.60. The Q's crossed the 20 week SMA on the weekly chart which will now act as support. There is further support lower at 45.19 and 43.80. Resistance occurs at 46.60 and then 47.20 and 47.60 on the weekly chart. It must get through all those points to have a chance at changing the trend from flat to up. It is a bit troubling that the 20 Week SMA is about to cross down trough the 50 week SMA with the other SMA's flat. There is some room higher but keep an eye on that cross.

So next week looks like there may be a pullback or at least a rest for Gold and a rest or maybe a rise for the US Dollar Index. US Treasury Bonds are on support but look weak and headed lower. Although Oil looks strong it is at resistance and may need some time to work through it. Volatility seems to have found a bottom, although still weak, which should allow stocks to continue their move higher, towards a test of the top of the four month (or maybe one year) channel. Good luck next week!