SPY Technical Analysis & Weekly Stock Market Update


Chart done on hourly timeframe. The stock market posted its third consecutive positive week last week after a better than expected inflation report. The Consumer Price Index (CPI) reflected consumer prices rose 3.2% in October, decreasing from the 3.7% in the previous month. Market were alleviated to see inflation moving closer to The Fed’s 2% target rate as it could mean no further interest rate hikes are necessary. Apart from inflation data, there were several retail related reports last week, including earnings from Target, Walmart, and Home Depot. Earnings from these big-box retailers were positive, but their forward guidance was mixed, citing weaker than expected consumer spending activity. Their comments were reinforced by the monthly retail sales report, which fell to its lowest level in seven months. 

The upcoming week will be a shortened holiday week as markets will close in recognition of Thanksgiving. Market activity during holiday weeks varies, but historically we’ve seen low volume during these weeks. 

Technical analysis:

Although trading activity slowed down to end last week, markets generally held a bullish trend and managed to close near their most recent highs. The first resistance in focus for SPY coming into the week is 453.65, buyers need a move above that level to see our price target of 459.00-460.00. To the downside, the most critical support is 445.90, if broken, then SPY is at risk of filling the gap down towards 442.00.