Market Analysis

SPY|QQQ Friday 8AM 9/13/2024

September 13, 2024 3 min read

Market Sentiment Analysis

Overall Market Sentiment

SPY (S&P 500 ETF):
Based on the 30-minute intraday chart over the past 30 days, SPY has exhibited a bullish trend with recent confirmations in the past 13 bars. The latest volume trends show a slight decrease in volume, suggesting caution among traders. The 50-period moving average for recent 13 bars has been steadily upward, supporting the bullish sentiment. However, any breakdown beneath the 560 level with significant volume could change the trend direction. Key observation here is the price maintaining slightly above the moving average which could signify resilience and strength.

QQQ (Nasdaq-100 ETF):
Similar to SPY, QQQ’s 30-minute intraday chart reveals an upward trend. The recent 13 bars show a consistent price range between 473.07-474.25, with stabilization near the 473.65 level supported by increasing volume, especially in the 07:00-08:00 bars, indicating potential accumulation. The moving averages also depict an upward inclination, which reinforces the bullish momentum.

VXX (Volatility Index):
The VXX chart indicates little upward movement in volatility, with no significant spikes over the past few bars. The recent peak at 49.06 hints at a mild increase in uncertainty but overall remains stable. This stability in VXX suggests continued bullish confidence in the market and doesn’t currently imply an impending major sell-off for SPY and QQQ.

Sector Analysis

Strong Sectors:
1. XLC (Communication Services): XLC shows relatively stable price action with a slight uptick in the most recent bar. Volume spikes mid-session suggest interest.
2. XLY (Consumer Discretionary): The recent uptick and volume indicate positive investor sentiment towards discretionary spending sectors.
3. XLK (Technology): Although mixed, it showcases some resilience, bouncing back quickly on minor dips.

Weak Sectors:
1. XLRE (Real Estate): Shows small volumes and little to no price movement. Mixed signals but generally stagnant.
2. XLU (Utilities): Shows minimal price movement and limited trading activity, indicating low investor interest.

Key Levels to Watch

SPY:
– Support: 559.23
– Resistance: 560.68
These levels become critical; a move above 560.68 could signal further bullishness, while breaking below 559.23 might indicate a shift to bearish sentiment.

QQQ:
– Support: 473.07
– Resistance: 474.25
The price remaining within these bounds is crucial. Breaches could signal significant momentum shifts.

Scenarios

Bullish Scenario:
For SPY and QQQ, positive outcomes could arise from favorable economic data, such as improved GDP growth rates, or unexpectedly strong earnings reports from leading companies, which would drive prices higher. Should the SPY breach above the 560.68 level with strong volume, a breakout pattern might trigger further bullish actions. For QQQ, a similar breach above the 474.25 resistance could open up paths to further gains.

Bearish Scenario:
Negative outcomes like disappointing economic news, rising geopolitical tensions, or inflationary pressures could drive SPY and QQQ lower. For SPY, a drop below 559.23 might indicate a bearish reversal, while QQQ moving below 473.07 could signal bearish momentum. High volume on these downward moves would confirm the bearish trends.

Overall Commentary

The broader market appears cautiously optimistic, with SPY and QQQ showing upward momentum despite low volume recently. Sector-wise, Communication Services, Technology, and Consumer Discretionary are demonstrating strength, while Real Estate and Utilities lag. Key support and resistance levels should be monitored closely for any deviations that could indicate changes in market sentiment. The generally low volatility in VXX supports the current trend, barring any sudden market shocks.