Market Analysis

SPY|QQQ Monday 8AM 8/25/2025

August 25, 2025 3 min read

Market Sentiment Analysis

Overall Market Sentiment

SPY (S&P 500 ETF):
Over the past 30 days, the SPY’s price action on the 30-minute chart has shown a consistent uptrend, indicated by an alignment of moving averages (short-term above long-term). In the recent 13 bars, we notice a modest retracement in volume, which could suggest consolidation or a hesitation among traders. A notable development is the slight decrease in closing prices with decreasing volume, which may signify a lack of strong selling pressure, possibly hinting at a continuation or bounce back up.

QQQ (Nasdaq-100 ETF):
The QQQ reflects a similar sentiment to SPY, maintaining an uptrend on the 30-minute chart. The recent 13 bars display diminishing volume alongside stable or slightly declining prices. This scenario typically suggests consolidation, with the potential for a bullish move if volume picks up with a corresponding price increase.

VXX (Volatility Index):
Examining VXX suggests a period of low volatility with no significant spikes over the last few sessions. The lack of upward movement in VXX is generally a positive sign for both SPY and QQQ, indicating a lower level of risk perception among traders.

Sector Analysis

Over the past 30 days, sector performance reveals some rotation:
– Strong Sectors: XLC (Communication Services) and XLK (Technology) have shown relative strength, which is often associated with risk-on sentiment.
– Weak Sectors: XLP (Consumer Staples) and XLU (Utilities) underperformance indicates a potential shift away from defensive sectors.

This sector rotation suggests a bullish tilt as investors appear to be favoring growth and technology-focused sectors.

Key Levels to Watch

SPY:
– Key Support: 641.50
– Key Resistance: 645.00
Critical resistance at 645.00 remains a threshold for potential bullish momentum if breached.

QQQ:
– Key Support: 568.00
– Key Resistance: 572.00
Watching the upper resistance at 572.00 could indicate a breakout, spurring further gains.

Scenarios

Bullish Scenario:
For both SPY and QQQ, a breakout above their respective resistance levels, coupled with increased volume, could signal a bullish continuation. Positive economic data or strong corporate earnings could serve as catalysts.

Bearish Scenario:
Potential bearish scenarios include a breakdown below current support levels, especially if exacerbated by negative macroeconomic developments or rising geopolitical tensions. The VXX would likely rise in such a scenario, indicating increased market volatility.

Overall Commentary

The current market environment reflects a cautious optimism, with SPY and QQQ maintaining their uptrends amidst sector rotation that favors growth-oriented fields. The absence of volatility spikes suggests limited immediate downside risk. However, traders should remain vigilant of key technical levels and external influences that may shift sentiment rapidly.