Market Analysis

SPY|QQQ Monday 1PM 6/17/2024

June 17, 2024 3 min read

Market Sentiment Analysis

Overall Market Sentiment:

SPY (S&P 500 ETF):
Analyzing the 30-minute intraday chart for the past 30 days, there’s an interesting pattern in the last 13 bars. Significant volume spikes occurred during the rally periods, suggesting strong accumulation phases. The moving averages indicate a bullish run, with prices making higher highs and higher lows. However, during the last few bars, there’s a consolidation phase, hinting at a potential pause or mild correction before a new trend direction.

QQQ (Nasdaq-100 ETF):
Similar to SPY, QQQ displays a bullish sentiment over the past 30 days, evidenced by ascending price movements and rising moving averages. Volume analysis in the recent 13 bars shows consistent buying interest, particularly around intraday dips, indicating strong support levels. The ETF is near its recent highs, implying potential breakout zones if buying pressure persists.

VXX (Volatility Index):
VXX has shown a subdued performance with gentle downward trends, implying lower expectations for volatility. Recent bars show minimal activity, reflecting investor complacency and confidence in a stable market. Lack of significant spikes in VXX correlates with bullish sentiment for major indexes like SPY and QQQ.

Sector Analysis:

XLC (Communication Services): Steady uptrend with minor pullbacks, good volume in recent bars, indicating reliability.
XLY (Consumer Discretionary): Favorable sentiment, driven by strong volume during price ascents.
XLP (Consumer Staples): Consistent upward movement and notable volumes, showing resilience.
XLE (Energy): Considerable bullish activity reflecting robust performance in energy stocks.
XLF (Financials): Moderate upward trend, volumes surging at critical high points.
XLV (Health Care): Stable growth with solid volume indicators, suggesting underlying strength.
XLI (Industrials): Gradual ascent, with brief consolidation and breakout patterns.
XLK (Technology): Strong bullish trajectory with substantial volume, signalling a sector of interest.
XLB (Materials): Stable upward trajectory, indicative of decreased volatility.
XLRE (Real Estate): Slow ascent but stable, with consistent support.
XLU (Utilities): Gentle upward trend indicating low but steady investor interest.

Given this analysis, Technology (XLK) and Energy (XLE) sectors seem particularly strong, suggesting possible sector rotation into these areas could influence overall market strength.

Key Levels to Watch:

SPY:
– Support Levels: 542.94, 543.48
– Resistance Levels: 545.91, 547.00

QQQ:
– Support Levels: 479.95, 480.53
– Resistance Levels: 483.25, 485.00

Scenarios:

Bullish Scenario:
For SPY and QQQ, a bullish scenario would involve breaking above near-term resistance levels driven by continued favorable economic data (like lower unemployment claims or higher consumer spending), strong earnings season results, or a technical breakout pattern. Watch for sustained volume to confirm buying pressure.

Bearish Scenario:
Negative economic news (such as higher-than-expected inflation rates) or geopolitical tensions could lead to a downturn. Technical breakdowns below the critical support levels may signal further declines. Monitor VXX for sharp upticks as an early warning sign.

Overall Commentary:

The overall market sentiment remains cautiously bullish, indicated by higher highs and higher lows in SPY and QQQ, along with strong sector performances particularly in Technology (XLK) and Energy (XLE). Investors are displaying confidence, likely due to favorable economic conditions and earnings reports. Key resistance levels approaching could serve as pivot points. However, the lack of volatility in VXX suggests low perceived risk among investors.

A successful breakout above current resistance levels in SPY and QQQ could ignite further upward momentum. Conversely, any significant bearish catalysts (economic or geopolitical) could trigger a sell-off, emphasizing the importance of close monitoring.