SPY|QQQ Friday 8AM 8/09/2024

August 9, 2024 3 min read

Overall Market Sentiment:

SPY (S&P 500 ETF):

Price Movement & Volume Trends: Over the past 13 bars, SPY has shown a mixed trend. Notably, there was a decline from 532.22 to 529.8396 over the recent bars despite some intraday recovery attempts.
Volume Analysis: Volume spiked during the initial drop, especially around the 8 AM mark with 267,993 shares traded, indicating significant selling pressure.
Moving Averages: If we consider the short-term moving averages (e.g., 5-period and 10-period), a downward crossing may suggest bearish momentum.

QQQ (Nasdaq-100 ETF):

Price Movement & Volume Trends: A similar trend as SPY has been observed in QQQ. From a high of 450.4800, QQQ declined to 447.05 in the recent bars.
Volume Analysis: Increased volume noted during the 8 AM bar (276,970 shares), consistent with significant price moves but showing potential stabilizing buying interest at lower levels.
Moving Averages: Short-term moving averages likely show bearish alignment with recent price depreciation.

VXX (Volatility Index):

Price Movement: VXX displayed a notable spike around 7:30 AM, moving from 61.37 to 62.77, then maintained elevated levels, closing at 62.45.
Volume Analysis: Significant volume increase at the time of the spike indicates heightened market fear or volatility expectations, usually inversely correlated with SPY and QQQ.

Sector Analysis:

Strong Sectors:

XLY (Consumer Discretionary): Trading near its highs, indicating risk-on sentiment in consumer sectors.
XLC (Communication Services): Maintaining stable prices with low volatility, suggesting stability and investor confidence.

Weak Sectors:

XLU (Utilities): Displaying minimal price movement but with a potential bullish uptick, often a defensive play during broader market uncertainty.
XLV (Health Care): Stagnant price action, not participating in broader market movements.

Key Levels to Watch:

SPY:

Support Levels: 529.00 (recent intraday lows).
Resistance Levels: 532.50 (recent highs and moving average resistance).

QQQ:

Support Levels: 447.00 (important psychological level and recent low).
Resistance Levels: 450.50 (upper band resistance formed recently).

Scenarios:

Bullish Scenario:

SPY and QQQ: Positive economic data or earnings surprises could catalyze a breakout above resistance levels. Technical patterns such as a reclaim of short-term moving averages may indicate bullish reversals.

Bearish Scenario:

SPY and QQQ: Negative economic news, geopolitical tensions, or strong downward momentum breaking recent support levels could accelerate the sell-off. Watch for increases in VXX, which might signal increased fear and hedge positioning.

Overall Commentary:

Recent trading in SPY and QQQ indicates near-term bearish sentiment with significant downward pressure in sectors like Utilities and Health Care. However, Consumer Discretionary and Communication Services sectors show relative strength, hinting at selective rotation rather than broad-based liquidation. Careful attention should be given to the key levels; breaks could substantiate larger moves. Investors may seek refuge in defensive sectors if volatility persists, as indicated by the VXX spike. Traders should watch for volume surges at critical levels to gauge conviction.