Market Analysis

SPY|QQQ Friday 8AM 10/03/2025

October 3, 2025 3 min read

Market Sentiment Analysis:

Overall Market Sentiment:

SPY (S&P 500 ETF):

On the 30-minute intraday chart, SPY has been showing mixed signals over the past 30 days. Over the recent 13 bars, we’ve seen slight downward pressure with openings generally lower than previous closes, suggesting caution among traders. The average volume has slightly decreased, indicating less conviction. The price action around the moving averages hints at potential congestion, with minor price movement around those levels.

QQQ (Nasdaq-100 ETF):

QQQ demonstrates a technical softness mirroring SPY, with recent closings commonly lower than the openings. The dropping trend over the last 13 bars may suggest growing bearish sentiment in the tech-heavy Nasdaq. Volume trends show sporadic spikes, potentially indicating institutional sell-offs. The moving averages could be in a downward crossover, suggesting a short-term bearish trend.

VXX (Volatility Index):

VXX shows some stabilization recently, with minor upticks in the past sessions, signifying slight apprehension among investors about near-term market conditions. There have been no major volatility spikes, which would correlate with a panic or major market movement. The current trend suggests controlled caution rather than extreme fear, seen in volume decreases.

Sector Analysis:

Over the past 30 days, select sectors have shown disparate performance:

Strength: XLC (Communication Services) seems resilient, potentially buoyed by solid results or sentiment from key components like media or telecom industries. XLRE (Real Estate) has shown signs of strength too, which might correlate with interest rate stability.
Weakness: XLY (Consumer Discretionary) and XLK (Technology) exhibit underperformance, possibly due to broader market choppiness and tech sector-specific pressures such as regulation or earnings misses. XLB (Materials) has been lackluster, possibly due to international trade impacts affecting commodity prices.

Sector Rotation:
Evidence of rotation suggests investors are seeking refuge in perceived safer havens like Communication Services and Real Estate from more volatile Technology and Consumer Discretionary sectors.

Key Levels to Watch:

SPY:

Support: Immediate key support exists around 670, with stronger support possibly forming near 668.
Resistance: Look for resistance near 673-675, particularly if tested on increased volume.

QQQ:

Support: Minor support is around 606, with significant structural support not until we see 603-604 areas.
Resistance: First resistance could be found near 610 with more formidable barriers sitting around 612.

Scenarios:

Bullish Scenario:

For SPY and QQQ, a bullish scenario could be fueled by a combination of strong earnings reports from major constituents, conflicting macroeconomic data turning positive, or technical breakouts through recent resistance levels on solid volume, pushing momentum indicators upwards.

Bearish Scenario:

A bearish turn may emerge from negative guidance or disappointing data releases – such as GDP or employment figures – alongside geopolitical unrest. Technical breakdowns below identified support regions could trigger additional selling pressure, accelerating declines.

Overall Commentary:

The market exhibits caution as mixed economic indicators and sector-specific issues (particularly in Technology and Consumer Discretionary) weigh on sentiment. However, specific sectors like Communication Services and Real Estate offer a refuge amidst broader volatility. Market participants should remain attentive to macro signals and sector shifts, while closely monitoring key levels that may presage larger moves. This environment suggests maintaining vigilance and flexible strategies for both upward potential and downside protection.

Charts: