SPY|QQQ Friday 4PM 8/30/2024

August 30, 2024 3 min read

Market Sentiment Analysis:

Overall Market Sentiment:

SPY (S&P 500 ETF):

Analysis of the last 30 days, focusing on the recent 13 bars:

Price Trends: SPY has shown strong upward movement in the past 13 bars, closing recently at $563.65. The highest spike was seen in the bar closing at 15:30 with a peak of $564.20.
Volume Trends: There was significant volume during the recent uptrend; particularly between 15:00 to 16:00, with volumes reaching as high as 14,087,449 at its peak.
Moving Averages: The data indicates that SPY is trading above its short-term moving averages, implying a bullish short-term momentum.

QQQ (Nasdaq-100 ETF):

Analysis parallel to SPY:

Price Trends: QQQ has also demonstrated a consistent uptrend, closing at $476.27, with significant momentum especially in the bar closing at 15:30 with a high of $476.90.
Volume Trends: Volume spikes were correlated with price peaks, indicating robust buying interest. The highest volume noted was 6,053,720.
Moving Averages: QQQ is trading above key moving averages, similar to SPY, indicating positive sentiment.

VXX (Volatility Index):

Assessing Market Volatility:

Price Trends: VXX showed a downtrend, closing the latest session at $44.62, down from its open of $44.98.
Volume Trends: Notably lower volumes in the most recent bars indicate reduced market anxiety.
Impact on SPY & QQQ: The declining VXX suggests a relatively calm market, reducing the probability of abrupt market downturns for SPY and QQQ.

Sector Analysis:

Strong Sectors:
- XLC (Communication Services):
- Closed at $87.31, with a strong uptrend in volume and price.
- XLY (Consumer Discretionary):
- Closed at $187.05, showing strong upward momentum.
- XLK (Technology):
- Closed at $220.30, with consistent uptrend and significant volume spikes.
Indications of Sector Rotation:
- XLE (Energy): Uptrend with notable volume increase, closing at $91.13.
- XLF (Financials): Rising trend, closing at $45.66.
The strong performance in Communication Services, Technology, and Consumer Discretionary suggests a rotation towards growth-oriented sectors, while Financials and Energy indicate possible sectoral resilience.

Key Levels to Watch:

SPY:

Support Levels: $550.00, $555.00
Resistance Levels: $565.00, $570.00
- A break above $570 could signify strong bullish momentum.

QQQ:

Support Levels: $470.00, $475.00
Resistance Levels: $480.00, $485.00
- Sustaining above $485 could attract further buying interest.

Scenarios:

Bullish Scenario:

For SPY and QQQ:
– Key Factors:
– Positive economic data releases confirming economic resilience.
– Strong earnings reports from major component stocks.
– Breakout above key resistance levels (SPY above $570, QQQ above $485).
– Dovish sentiments or policies from the Federal Reserve.

Technical triggers like crossing above key resistance levels and positive volume trends should be monitored.

Bearish Scenario:

For SPY and QQQ:
– Key Factors:
– Negative economic news such as disappointing jobs data or inflation reports.
– Geopolitical tensions escalating, causing market anxiety.
– Technical breakdowns below critical support levels (SPY below $555, QQQ below $470).
– Spikes in VXX suggesting increased market volatility.

Notable technical reversals and volume divergences could imply potential corrections.

Overall Commentary:

The current market environment is reflective of a positive sentiment, backed by strong volumes and upward price trends in key indices like SPY and QQQ. Sectoral strength in Technology, Communication, and Consumer Discretionary emphasizes investors’ preference towards growth sectors. Despite this, vigilance is required as any negative economic news or geopolitical tension could reverse the current trends. Key levels mentioned should act as guideposts for near-term trading strategies.