SPY Technical Analysis & Weekly Stock Market Update


Chart done on hourly timeframe. A very eventful week is coming up for the markets as investors prepare for the latest inflation readings, Apple’s annual Keynote presentation, and retail sales data. Last week, The Fed’s Beige Book was released and it highlighted The Fed’s willingness to raise rates further if needed, but many members were optimistic that inflation is indeed on the right track of cooling down. The last CPI report showed a slight MoM uptick in inflation from 3.0% to 3.2%, the first uptick since June 2022, but still significantly down from the YoY number of 8.3%. All in all, inflation is moving on the right track, but The Fed are very cautious about taking their foot off the gas on restrictive monetary policy just yet. This week’s CPI must come in at or below expectations or else it nearly guarantees that more interest rate hikes are coming. 

Apple’s Keynote presentation is expected Tuesday so that should bring some activity to the stock and to technology sector all around. Last week, Apple lost $200B in market value after China’s decision to ban iPhone use for government officials, a move that has deeper implications into a cold economic war between the U.S. and China. Investors have already been a bit nervous about Apple’s declining sales over the last three quarters, so this decision and what it could possibly lead to was one that shocked the stock. Although Apple remains dominant, investors haven’t seen exciting innovation in the iPhone in years, which has slowed sales as users keep their phones longer. The company is expected to showcase the new iPhone 15 and Apple Watch Series 9, markets want to see exciting updates that can stir up buying. 

Last but not least, August retail sales data is expected this week. Retail sales have been in positive territory nearly every month this year apart from February and March. July’s retail sales figure came in at .7%, above the .4% consensus. Projections for August are only .2%, a lower target that previous months. Retail sales are important to watch because they directly reflect how consumers are feeling on the frontline. 

Technical analysis:

Last week’s market action was combined with low volume and low momentum, making it a bit more challenging for traders to navigate. This week there are far more events that can bring about volume, but direction is a bit uncertain in the near term. We’re taking a neutral mindset coming into this week, focusing on the 50 day moving average on SPY (Not shown in chart above, look at daily time chart for reference). SPY ended last week just below this moving average, so buyers will be watching for a move back above it to regain some confidence. First resistance in the way of SPY is 448.60, above that the target to break back into a bullish trend is 453.70. For a support, 440.00-440.80 is the critical level SPY needs to hold to avoid a further sell-off to 435.00-436.00.