SPY Technical Analysis & Weekly Stock Market Update


Normal trading is back in full swing this week after last week’s shortened holiday schedule. Despite last week’s low trading volume and momentum, traders managed to hold the markets near their recent highs, maintaining the overall bullish trend. There are some key events and reports expected this week that will test the strength of the bulls at these highs, the most important being the Personal Consumption Expenditures (PCE) report. The PCE index will provide markets with the latest inflation numbers like the CPI did a few weeks ago, but this is more important because it is The Fed’s preferred inflation gauge. The Fed is expected to hold their FOMC meeting in about two weeks, so the results of The PCE index could be the determining factor of whether we see another rate hike from The Fed this year. Also on the calendar this week are the Consumer Confidence (Nov) report, and the final revision of U.S. Q3 GDP. Economic data is nothing new to markets, but it could be a big test when markets are trading in an “overbought” zone, any surprises may scare buyers into taking profits. 

SPY technical analysis:

Overall relative strength on SPY is still in strong territory, there are no indications as of now that are pointing to a bearish reversal, but we do expect a “choppy” environment as these highs can make some traders uncomfortable. Our target for SPY above the break of 456.40 is 460.00-462.00 to start.