Market Analysis

SPY|QQQ Monday 4PM 6/10/2024

June 10, 2024 4 min read

Market Sentiment Analysis

Overall Market Sentiment:

SPY (S&P 500 ETF):
Based on the 30-minute intraday chart for the past 30 days, with emphasis on the recent 13 bars, we can observe the following:

Volume Trends: There has been a notable spike in volume during the sessions around 15:30 and 16:00. This indicates significant trading activity and potential institutional involvement in the market around these times.
Moving Averages: The price is hovering close to the short-term moving average, showing some hesitation and consolidation around the 535.50 – 535.65 range.
Price Movements: Recent price action has shown higher lows, signaling a potential uptrend. However, the inability to break significantly above 535.70 may indicate resistance at this level.

QQQ (Nasdaq-100 ETF):
– Volume Trends: Similarly, QQQ shows increased volume around the market close, especially between 15:30-16:00, indicating strong end-of-day trading interest.
– Moving Averages: QQQ is showing signs of consolidation near its recent highs of 464.90. The price is maintaining its position above the short-term moving average, which suggests some bullish momentum.
– Price Movements: The bounce from the low of 463.11 up to a high of 464.89 in the last 13 bars suggests buying interest at lower levels and a potential upward continuation.

VXX (Volatility Index):
– Volume Trends: The volume in VXX has been relatively stable, with a notable increase around 15:00.
– Price Movements: There have been minor fluctuations between 11.08 and 11.15 indicating relatively low volatility in the market.
– Impact on SPY and QQQ: The lack of significant spikes in VXX suggests a calm market sentiment, which bodes well for continued stability in both SPY and QQQ.

Sector Analysis:

Strong Sectors:
– XLK (Technology): The technology sector, indicated by XLK, remains strong with consistent higher highs and strong volume.
– XLY (Consumer Discretionary): Showing strength with recent highs and consistency in volume and upward movement.

Weak Sectors:
– XLU (Utilities): Exhibits some weakness, evident from its inability to hold higher levels and showing signs of pulling back at the end of trading.
– XLP (Consumer Staples): Volume is high but there is a struggle to break out of the current consolidation zone.

Sector Rotation:
– There appears to be some rotation out of defensive sectors like XLU and XLP, with continued interest in growth sectors such as technology (XLK) and consumer discretionary (XLY).

Key Levels to Watch:

SPY:
– Support Levels: 534.50 – 534.60
– Resistance Levels: 535.70 – 536.00
Critical levels that could influence trading decisions include the 535.70 resistance level. A break above this level could indicate bullish momentum.

QQQ:
– Support Levels: 463.50 – 463.90
– Resistance Levels: 465.00 – 465.50
Important areas to watch would be a break above 465.00 to signal further bullish sentiment.

Scenarios:

Bullish Scenario:
– SPY and QQQ: A potential bullish scenario could be driven by positive economic data and strong earnings reports. If SPY manages to break through the 535.70 resistance level with increased volume, it could trigger stop orders and push the price higher. Similarly, if QQQ breaks above 465.00 with strong volume, it can lead to a rally driven by the technology sector’s strong performance.

Bearish Scenario:
– SPY and QQQ: A potential bearish scenario could develop if negative economic news arises or increased geopolitical tensions occur. A break below the support levels of 534.50 for SPY and 463.50 for QQQ with significant volume could signal a market downturn. This could indicate a lack of confidence and trigger further selling pressure.

Overall Commentary:

Integrating the insights from the sentiment analysis, sector performance, and key levels, the overall market environment appears cautiously optimistic, with strength in growth sectors signaling potential upside. The calmness in the volatility index further supports the bullish sentiment. However, key resistance levels in both SPY and QQQ need to be monitored closely. Breaking these levels with significant volume will be critical for confirming the bullish momentum. Conversely, failure to hold support levels may signal a retracement. Traders should be vigilant about upcoming economic data and geopolitical developments which could affect market sentiment.