Market Analysis

SPY|QQQ Monday 4PM 8/26/2024

August 26, 2024 3 min read

Market Sentiment Analysis:

Overall Market Sentiment:

SPY (S&P 500 ETF):
Analyzing the 30-minute intraday chart for SPY over the past 30 days, the recent 13 bars (last 6.5 hours) show a slightly positive trend. The prices have held above a critical level of $560, with higher highs and higher lows. The volume indicates steady buying pressure, though it’s fragmented toward the end with a spike at the start of the interval analyzed.

Recent volume trend suggests increased activity.
Moving averages (e.g., 20-period) trending upward.
Notable price movement: A rise from $559.51 to $561.90, indicating strong momentum.

QQQ (Nasdaq-100 ETF):
For QQQ, the last 13 bars (6.5 hours) indicate a strong upward trend, with consistent higher highs and higher lows. The volume has shown a degree of consistency with intermittent spikes indicating significant interest.

Steady, robust volume.
Moving averages indicate upward momentum.
Major price movement from $473.97 to $476.00 supports bullish sentiment.

VXX (Volatility Index):
The VXX index saw slight declines suggesting decreased volatility. The periods examined showed the low at $45.68 and closing at $46.13. This decrease in VXX often implies a more bullish sentiment for indices like SPY and QQQ.

Volume consistent but lower in later periods.
Decline in index value from $46.63 to $46.13 indicates less fear in the market.

Sector Analysis:

XLC (Communications Services): Price held steady with a slight upward trend but moderate volume.
XLY (Consumer Discretionary): Consistent closes around $186.30-$186.60, indicating stability in this sector.
XLP (Consumer Staples): Slight upward momentum observed, particularly with a spike near the end.
XLE (Energy): Shows steadiness around $91, indicating strong stability.
XLF (Financials): Similar upward momentum and stability.
XLV (Health Care): Stability around $155.35, moderate volume.
XLI (Industrials): Slight upward trend around $129.26.
XLK (Technology): Strong upward momentum noticeable.
XLB (Materials): Steady with slight upside movement.
XLRE (Real Estate): Stable with no significant movement.
XLU (Utilities): Stable with slight upward tilt.

From the different sectors, Technology (XLK) and Financials (XLF) seem to lead, while Utilities (XLU) and Real Estate (XLRE) remain stable with less volatility.

Key Levels to Watch:

SPY:
– Support: $560.00
– Resistance: $561.90
– Critical Levels: $559.50 on the downside and $562.00 on the upside could indicate larger movements.

QQQ:
– Support: $475.00
– Resistance: $476.00
– Critical Levels: $473.50 on the downside and $476.50 on the upside pending breakout or breakdown.

Scenarios:

Bullish Scenario:
For SPY and QQQ, the bullish momentum can continue if:
– Unexpected positive economic data is released.
– Positive earnings reports come in, especially from large-cap tech.
– Technical breakouts above the identified resistance levels.

Bearish Scenario:
For SPY and QQQ, downside scenarios can unfold from:
– Negative economic data or reports.
– Geopolitical tension escalating.
– Technical breakdowns below the key support levels.

Overall Commentary:

The market sentiment, as indicated by SPY and QQQ, is predominantly bullish in the short term, reinforced by consistent volume and upward price movement. The decline in VXX supports less market fear and volatility. Sectors like Technology (XLK) and Financials (XLF) are leading, suggesting that these areas are subject to higher investor confidence. Key levels should be monitored closely, as breakouts or breakdowns determine short-term trading strategies. The overall environment suggests a cautiously optimistic market, with more room for upward movement but watch for levels around $561.90 in SPY and $476.00 in QQQ for potential profit-taking or breakout opportunities.