Market Analysis

SPY|QQQ Friday 1PM 6/28/2024

June 28, 2024 4 min read

Market Sentiment Analysis

Overall Market Sentiment:

SPY (S&P 500 ETF)

Analyzing the SPY 30-minute intraday chart over the past 30 days, with a particular focus on the most recent 13 bars, which equates to about 6.5 trading hours:

Price Movement: The recent price action shows a slight decline, from an open near 548.62 to closing at around 546.8299.
Volume Trends: Volume has been varying, with no significant spikes but a consistent average across the bars, indicating steady participation.
Moving Averages: If we consider the shorter-term moving averages, it appears that the SPY is potentially experiencing downward pressure. The 10-period MA could be crossing below the 30-period MA, suggesting bearish short-term sentiment.

Overall, the sentiment appears neutral to slightly bearish with consistent volume but no dramatic moves suggesting major fears or exuberance.

QQQ (Nasdaq-100 ETF)

For QQQ over the same 30-minute, 30-day period:

Price Movement: The QQQ has dropped slightly from 484.07 to approximately 482.190. The current trend, looking at the last 13 bars, also seems to show minor bearish tendencies.
Volume Trends: There has been consistent volume with no extraordinary anomalies. The volume trends are in line with the average, showing neither panic selling nor aggressive buying.
Moving Averages: Similar to SPY, short-term moving averages may be pointing downwards. There is a hint of cautious sentiment which is not significantly bearish but leans towards consolidation or corrective movements.

Overall, QQQ sentiment appears neutrally cautious with a slight bearish bias.

VXX (Volatility Index)

The VXX analysis helps us assess the market’s fear level:

Price Movement: VXX saw some movement from 10.7563 to 10.745 in the latest bars. This slight decline suggests that market participants are not significantly increasing their hedging or fear levels.
Volume Trends: Volume spikes are moderate. There wasn’t any extreme high volume that would suggest panic.

The sentiment here suggests a fairly calm market environment with low fear, as indicated by a steady VXX.

Sector Analysis:

By examining the sector ETFs (XLC, XLY, XLP, XLE, XLF, XLV, XLI, XLK, XLB, XLRE, XLU), certain trends emerge:

Strong Sectors:
- XLE (Energy): Showed some resilience with relatively stable price action. Energy stocks may be benefiting from macro factors such as oil prices.
- XLK (Technology): Despite a minor dip, overall strength in tech remains due to long-term trends and sector growth.
Weak Sectors:
- XLY (Consumer Discretionary): Faced some selling pressure recently and showed more notable declines.
- XLU (Utilities): Saw consistent declines, likely impacted from sector rotation out of defensive stocks.

Sector rotation seems to favor Energy and Technology, while Consumer Discretionary and Utilities are underperforming. This could imply a transition towards cyclicals and growth areas.

Key Levels to Watch:

SPY:

Support Levels: 545, 540
Resistance Levels: 550, 555

Given close prices around 546.8299, maintaining above 545 could prevent further bearish sentiment.

QQQ:

Support Levels: 480, 475
Resistance Levels: 485, 490

The price holding near 482 indicates staying above 480 is crucial for avoiding short-term sell-offs.

Scenarios:

Bullish Scenario:

For SPY and QQQ, a bullish scenario could involve:
– Positive Economic Data: Improved manufacturing or employment stats.
– Strong Earnings Reports: Major tech or industrial earnings surprises.
– Breakout Patterns: Technical break above 550 for SPY and 485 for QQQ could drive further momentum.

Bearish Scenario:

Conversely, a bearish scenario could involve:
– Negative Economic News: Any disappointing GDP or consumer confidence data.
– Geopolitical Tensions: Escalations in trade wars or geopolitical conflicts.
– Technical Breakdowns: Falling below 545 for SPY and 480 for QQQ could drive bears to sell, impacting broader markets.

Overall Commentary:

Current market sentiment appears cautiously neutral with a slight bearish bias. The sectorial performance indicates potential rotations into Energy and Technology, while Consumer Discretionary and Utilities underperform. Traders and investors should remain vigilant of key support and resistance levels to guide their short-term strategies. In such a mixed environment, close attention to economic data and technical indicators will be crucial for determining direction.