Market Analysis

SPY|QQQ Friday 1PM 7/12/2024

July 12, 2024 3 min read

Market Sentiment Analysis

Overall Market Sentiment

SPY (S&P 500 ETF):

Looking at the 30-minute intraday chart over the past 30 days, SPY has shown a bullish trend with recent consolidation. Over the last 13 bars, there was a slight pullback followed by a quick recovery. This is characterized by a consistent pattern of higher highs and higher lows, exhibiting healthy volume spikes during upward movements.

Volume Trends: The recent 13 bars have shown volume sticking to a steady upward trend.
Moving Averages: The 50-period moving average remains above the 200-period moving average, supporting the current bullish sentiment.
Price Movements: The quick recovery from slight pullbacks suggests buying interest on dips.

QQQ (Nasdaq-100 ETF):

QQQ has mirrored SPY’s overall trend with a more pronounced bullish bias.

Volume Trends: Volume has been relatively consistent, with notable spikes during upward price movements.
Moving Averages: The 50-period moving average remains well above the 200-period moving average.
Price Movements: The recent 13 bars show recovery from minor dips and a continuation of the upward trend.

VXX (Volatility Index):

The VXX remains relatively stable, indicating low levels of market fear or uncertainty.

Volume Trends: VXX has experienced somewhat lower volumes, typical of a calm market.
Significant Spikes/Drops: No significant spikes or drops recently, reinforcing a low-volatility environment.

Sector Analysis

Over the past 30 days, the sector ETFs have displayed varied performance, indicating some sector rotation within the market.

Strong Performance:
– XLK (Technology): Notable for its strong uptrend and resilience.
– XLY (Consumer Discretionary): Consistent uptrend with brief consolidations and strong volume support.

Weak Performance:
– XLE (Energy): Despite some recent recoveries, it lags behind other sectors.
– XLU (Utilities): Lower performance, viewed as a defensive sector during bullish overall sentiment.

Sector Rotation Insights:
– Sector rotation into Technology (XLK) and Consumer Discretionary (XLY) suggests market confidence.
– Defensive sectors like Utilities (XLU) and Real Estate (XLRE) are underperforming, reinforcing a risk-on sentiment.

Key Levels to Watch

SPY:
– Support Levels: $560, $558 (recent lows).
– Resistance Levels: $562, $565 (recent highs).

QQQ:
– Support Levels: $496, $495 (recent lows).
– Resistance Levels: $498, $500 (recent highs).

Scenarios

Bullish Scenario:

For SPY and QQQ, further price advancements could be driven by:
– Positive economic data reports.
– Strong earnings, particularly in large-cap tech stocks.
– Breaking above recent resistance levels ($562 for SPY, $498 for QQQ).

Bearish Scenario:

A downturn in SPY and QQQ may occur due to:
– Negative economic news, such as poor job reports or declining GDP.
– Emerging geopolitical tensions or unexpected global crises.
– Technical breakdowns below significant support levels ($560 for SPY, $496 for QQQ).

Overall Commentary

The current market exhibits a bullish sentiment with sector rotations favoring growth sectors like Technology (XLK) and Consumer Discretionary (XLY). Low volatility, as indicated by the VXX, further supports this sentiment. Key levels for SPY and QQQ suggest caution for any significant pullbacks, yet the prevailing trend remains upward. Traders should monitor these support and resistance levels closely while staying alert for any major economic data or geopolitical events that could shift market sentiment.