Market Analysis

SPY|QQQ Monday 4PM 7/29/2024

July 29, 2024 4 min read

Market Sentiment Analysis

Overall Market Sentiment

SPY (S&P 500 ETF):
Examining the SPY’s 30-minute intraday chart for the past 30 days with a focus on the last 13 bars:
– Volume Trends: There is a noticeable spike in volume during the closing hours, suggesting institutional activity.
– Moving Averages: The price has been trading near the 50-period moving average, indicating a period of consolidation.
– Recent Price Movements: The recent 13 bars show a mix of higher lows and lower highs, hinting at an unchanged sentiment. The price is hovering around the $545.43—$544.76 levels.
– Observation: Given the data, the market sentiment for SPY is neutral to cautiously optimistic, lacking any drastic movements which might signify strong bullish or bearish tendencies.

QQQ (Nasdaq-100 ETF):
For QQQ, the analysis for the past 30 days, emphasizing the last 13 bars:
– Volume Trends: Like SPY, QQQ saw increased volume near market close, indicating potential accumulation by large traders.
– Moving Averages: QQQ is near its 50-period moving average, which aligns with market consolidation.
– Recent Price Movements: Last 13 bars suggest slight volatility with prices moving between $464.62 and $463.84. The closing price of $464.02 indicates potential stability.
– Observation: The sentiment is similarly neutral but leaning towards positive sentiment as stability suggests upholding current levels with minor deviations.

VXX (Volatility Index):
– Volume Trends: Volume has neither surged drastically nor dropped significantly, suggesting controlled volatility.
– Significant Movements: Minimal fluctuation in the VXX signals stable investor sentiment with no major fears of market disruption.
– Observation: As VXX showed stability with prices moving within a tight range ($46.17 to $45.72), this indicates low volatility ahead, which is a positive signal for both SPY and QQQ.

Sector Analysis

Sector ETFs (XLC, XLY, XLP, XLE, XLF, XLV, XLI, XLK, XLB, XLRE, XLU):
– Strong Performers: XLE and XLI demonstrated consistent performance with decent volume indicating investor confidence in energy and industrial sectors.
– Weak Performers: XLP and XLU had relatively muted volume, with little to no momentum hinting investors are currently not favoring these defensive sectors.
– Sector Rotation: Movement into growth-centric sectors like XLK and XLY suggests a shift away from defensive to growth-oriented investments, promoting a positive overall market outlook.

Key Levels to Watch

SPY:
– Support Levels: Immediate support around $544.50 with critical support near $543.
– Resistance Levels: Immediate resistance at $546.05 and major resistance around $548.
– Implications: Breaking below $543 could lead to bearish sentiment, while surpassing $546.05 may trigger a bullish rally.

QQQ:
– Support Levels: Strong support around $463.36 with further support at $462.
– Resistance Levels: Key resistance around $465.235 and major resistance near $467.
– Implications: A dip below $462 would signal caution, while breaching $465.235 could push the prices higher.

Scenarios

Bullish Scenario:
– SPY: Positive economic news or strong earnings reports could drive SPY above the $546.05 level. Technically, a breakout pattern above $546 could expose targets towards $548 and $550.
– QQQ: Strong tech sector earnings and optimistic economic data might propel QQQ past $465.235, signaling a bullish continuation targeting $467 and potentially higher levels.

Bearish Scenario:
– SPY: Negative economic data or geopolitical tensions could drag SPY below the $544.50 support level, testing the critical $543 support.
– QQQ: Similarly, adverse market news could see QQQ dip below $463.36, exposing it to further downside towards the $462 support.

Overall Commentary

The market shows a reasonably balanced sentiment with minor bullish trends, mainly reflected through sector rotations towards growth stocks and stable VXX readings indicating low imminent volatility. Immediate price levels are crucial for short-term direction, with SPY and QQQ poised at significant juncture points that may dictate the trend for the coming days.

Traders should observe how SPY reacts around $546.05 and QQQ at $465.235, as breakouts could lead to further upward momentum. Conversely, significant breakdowns could lean towards cautious trading approaches. Overall, the market environment seems stable with low volatility expectations, but closely monitoring the above-discussed key levels remains essential to navigate potential swings effectively.