Market Analysis

SPY|QQQ Friday 1PM 12/13/2024

December 13, 2024 3 min read

Market Sentiment Analysis:

Overall Market Sentiment:

SPY (S&P 500 ETF):
Analyzing the recent 13 bars on the 30-minute intraday chart for the past 30 days, SPY shows a slight upward trend with mixed volume. The moving averages suggest consolidation, hovering around key support levels with a slight bullish bias. Recent price movement indicates potential resistance around 604 and support near 602. Price action within these bounds and increased volume in the last bars suggest cautious optimism, as traders test upper resistance.

QQQ (Nasdaq-100 ETF):
QQQ exhibits a similar sentiment with a steady upward momentum over the past 13 bars, characterized by a minor increase after an initial drop. Prices have been testing resistance around 529 while maintaining support around 527. A mix of increased and moderate volumes during these movements hints at cautious buying interest, potentially driven by positive sentiments in major tech stocks.

VXX (Volatility Index):
VXX presents a muted volatility picture with slight fluctuations. No significant spikes indicate lowered fear or panic among investors. A stable VXX reflects subdued risk perception, fostering a favorable environment for SPY and QQQ to continue their bullish pursuits provided external conditions remain stable.

Sector Analysis:
Sector ETFs indicate varied performance. Notably strong movements are observed in XLY (Consumer Discretionary), which showed resilience and an upward trend. XLE (Energy) also displayed robust activity, reflective of possibly improved oil prices or favorable energy sector developments. In contrast, XLP (Consumer Staples) and XLRE (Real Estate) reveal more subdued movements, suggesting possible capital reallocation away from defensives towards growth-oriented sectors. Sector rotation hints towards risk-on sentiment, appropriate for short-term bullish plays.

Key Levels to Watch:

SPY:
Key support is seen at 602, with resistance at 604. A breakout above 604 on strong volume can push it to test further highs, while failure could see consolidation towards the lower range.

QQQ:
Support rests around 527, with resistance at 529. A robust push past 529 can invite bullish momentum, potentially driving QQQ to further highs, whereas failure to maintain could lead to deeper retracements.

Scenarios:

Bullish Scenario:
For SPY and QQQ, a bullish scenario thrives on continued low volatility as evidenced by VXX, alongside robust economic indicators or earnings surprises, particularly from heavyweight tech or consumer firms. Technical breakouts above 604 for SPY or 529 for QQQ on strong volume can propel prices to new highs.

Bearish Scenario:
A bearish scenario might unfold if unfavorable economic data surfaces, or geopolitical tensions rise, causing risk-off sentiment. Technical breaks below 602 for SPY or 527 for QQQ can trigger further selling pressure, augmented by increased VXX.

Overall Commentary:
Market sentiment remains slightly bullish but guarded. Stable volatility as shown by VXX suggests a conducive environment for equities to edge higher, particularly in growth and energy sectors. Traders are encouraged to remain vigilant on key levels and sector rotations, which might offer clues for short-term trading opportunities. Notable attention should be given to upcoming economic releases that might sway sentiments either way, ensuring strategic agility in the trading approach.

Charts: