SPY Technical Analysis & Weekly Stock Market Update


Chart done on hourly timeframe. Markets struggled to hold a direction last week as uncertainty about inflation returned after higher than expected CPI data. Year over year consumer inflation ticked up to 3.4%, .3% higher than the previous reading, but producer side inflation ticked down by .1%. The mixed data, combined with mixed bank earnings, left the market about flat to end the week. Big banks reported earnings on Friday, but many of them missed profit expectations, with names like JPMorgan citing last year’s buyouts as the culprit. Most bank stocks closed lower on Friday as traders sold shares, fearing that falling rates will send bank profits lower in 2024. 

Economic reports slow down this week, but Fed members will be very active giving speeches every trading day. Markets often see an increase in volatility when Fed members speak, so keep that in mind when positioning. One notable report to watch is the U.S. retail sales report, which will be released on Wednesday morning. Retail data is expected to be higher after a strong holiday season, but the market reaction to this may be mixed. On one hand, consumer spending fuels our economy, but on the other it may be seen as fuel for inflation. The chances of an interest rate cut already fell last week, another strong spending report may drop them even further. 

Technical analysis:

Some stocks suffered last week while others made new highs, but generally, major indexes are trading in bullish territory. The drop in volume and momentum to close out the week is worth noting as a signal of weakness so we’re treading lightly heading into this week. It is a shortened week in honor of Martin Luther King Jr. Day so volume may still be low on Tuesday after a three-day weekend. SPY’s breakout levels remain 478.67 and 480.00 to all time highs.