$TRIN & $TICK:
Except on Friday where there was some gyrations, hardly any negative ticks. $TICK just ripped higher and continues higher but may have some gyrations this upcoming week considering it is the monthly options expiration, especially towards mid-week.
Now, $TRIN was the rock star. As I mentioned multiple times on Stocktwits and Twitter, it seriously was a great gauge if one had noticed it’s intraday action. Low $TRIN entire week until it started to spike a tad on Friday.
I’ll be watching this one very carefully for any spikes towards mid-week which could mean a pause is coming/due.
% of S&P Stocks Above 50-Day Moving Average – 61.35. Was 29.68 last week.
Volatility Term Structure – $VIX:$VXV:
$VXV is the 3 month volatility index. The relationship between $VXV and $VIX (30 day volatility) or the ratio between them if > 1.00 often spells trouble for equities. This ratio is now below 0.90 at 0.86. Keep an eye on this as it is around the spot where it can turn and is also seen turning a bit. May be a pause for the equities (shorter term) is on cards sooner than later.
S&P 500 ETF (SPY) DAILY TIMEFRAME:
On a daily timeframe, $SPY started the week stronger to continue where it left off the prior week (Friday). On Tuesday, $SPY printed a Spinning Top DOJI – meaning indecision, a possible reversal sign if need be too. However, on Wednesday, it continued higher with a kiss of the 50 SMA. A chop fest continued until the FOMC on Thursday and soon after the news, the reaction was higher for stocks. It broke through the 50 SMA and prior resistance levels over 200. On Friday it tried to break 202 levels twice but chopped around a bit, getting some bears excited. A DOJI to end the week which can mean a possible reversal but can continue higher too. Basically another candle that indicates some indecision.
Overall, there was strong action for the entire week. We’ve come so far so quickly and a pause or sideways consolidation is normal here if need be shorter term. This doesn’t mean reversal and a much bigger move lower to call it bearish. Follow the price action and always try to keep it simple.
The momentum indicators are constructive. RSI is a tad below the median but continues to rise. It has a ton of room higher before being overbought. MACD made a bullish cross and has almost reached the median. One caveat here is that the black line is now extended from the red line and needs to consolidate a tad. Slow STO on this time is overbought and can get embedded before moving lower if need be. Bollinger Bands have opened up nicely supporting higher prices.
Thanks for reading and have a great week. You can read more of my weekly analysis on my website. Thanks for reading.
Twitter: @sssvenky
Author has a long position S&P 500 futures and calls, as well as SPY puts and various mixed options strategies. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
