SPY|QQQ Monday 1PM 7/22/2024

July 22, 2024 3 min read

Market Sentiment Analysis

Overall Market Sentiment:

SPY (S&P 500 ETF):

Recent 13 Bars Price Volume Development: Over the last 13 bars (approximately 6.5 hours), SPY has shown moderate volatility with prices primarily oscillating between $551.7 and $554.2. Notably, volume peaked during the early hours and has been tapering off, with a significant spike only occurring at the 11:00 AM interval.
Volume Trends: Volume levels suggest moderate to declining interest, with occasional spikes likely due to institutional transactions.
Moving Averages: The price action above the moving average indicates bullish momentum. SPY’s price closing consistently above the middle of its daily range hints at less seller pressure and more buying interest.

QQQ (Nasdaq-100 ETF):

Recent 13 Bars Price Volume Development: QQQ showed significant movement from $478.20 to $482.04. There was a pronounced upward movement post-12:30 PM, indicating strong buying momentum.
Volume Trends: Consistent volume with a noticeable drop in the last couple of bars as prices climbed, which might suggest exhaustion of sellers.
Moving Averages: The upward trajectory of the price crossing key moving averages implies that QQQ is in a short-term uptrend.

VXX (Volatility Index):

Sentiment: Declining trend over the past few intervals, moving from $11.19 to $10.99, indicating reduced market fear and uncertainty.
Volume Trends: Spike in volume earlier when price was around $11.22, accommodating the decline. Lower VXX prices generally correlate with higher confidence in equity markets.
Impacts: The drop in VXX suggests a bullish sentiment for SPY and QQQ, as lower volatility typically accompanies steady or rising markets.

Sector Analysis:

Strong Sectors:
- XLY (Consumer Discretionary): Consistently closed near highs, from $188.91 to $189.99, suggesting strong bullish momentum.
- XLK (Technology): Solid performance with continuously higher closes, particularly breaking crucial levels like $224.08 and $225.16.
- XLI (Industrial): Displayed strength, consistent with recent highs, closing at $125.80 after steady climb.
Sector Rotation: There’s evident strength in Consumer Discretionary, Technology, and Industrial sectors. Sector rotation is favoring these sectors indicating a risk-on sentiment, typically favorable for economic optimism.

Key Levels to Watch:

SPY:
– Support Levels: Immediate support around $551.70; stronger support at $550.00.
– Resistance Levels: Crucial resistance at $554.20; breaking this could lead to further highs towards $560.00.

QQQ:
– Support Levels: Immediate support around $478.20; additional support at $476.00.
– Resistance Levels: Key resistance observed at $482.00; breaking this could propel QQQ towards $485.00 and higher.

Scenarios:

Bullish Scenario:
– SPY & QQQ: Continued positive momentum in equity markets propelled by strong earnings reports, particularly from technology and financial sector companies. Favorable economic data, including improved employment statistics and consumer spending, could further drive indices higher.
– Technical Breakouts: For SPY, breaking the $554.20 resistance; for QQQ, surpassing $482.00 pointing towards new highs.

Bearish Scenario:
– SPY & QQQ: Potential decline due to negative economic developments such as disappointing GDP growth, resurgence of inflation fears, or geopolitical tensions disrupting markets. For SPY, breaking below $551.70 may indicate further downside, while for QQQ, falling below $478.20 could lead to declines towards $475.00.

Overall Commentary:

The overall market displays a cautiously bullish sentiment with a significant downward trend in VXX reflecting reduced volatility and stress. Strong performances in Consumer Discretionary and Technology sectors indicate investor confidence in growth-oriented sectors. SPY and QQQ both show potential for upsides, contingent on breaking specific resistance levels, with key support levels likely providing a floor for any downside movements. Traders should watch for key economic releases and earnings reports which could further clarify market direction.