SPY|QQQ Monday 8AM 9/16/2024

September 16, 2024 4 min read

Market Sentiment Analysis

Overall Market Sentiment

SPY (S&P 500 ETF)

30-Minute Intraday Chart Analysis (Past 30 Days with Emphasis on Recent 13 Bars)

Volume Trends: The past 13 bars show a mixed volume trend with notable spikes in volumes during the periods of price movement, signaling investor interest at key price levels.
Moving Averages: The recent 13 bars indicate a slight downward movement but not a distinct trend change. The price has been oscillating but maintaining an overall bearish tone in the short term.
Price Movements: Recent bars show that volatility has increased slightly, with the price testing lower support levels more frequently.

QQQ (Nasdaq-100 ETF)

30-Minute Intraday Chart Analysis (Past 30 Days with Emphasis on Recent 13 Bars)

Volume Trends: Elevated volume in the last few sessions indicates active participation, but without a clear bullish or bearish skew.
Moving Averages: Similar to SPY, QQQ’s moving averages are showing some short-term bearishness. The price is hovering around key moving averages without breaking significantly above or below.
Price Movements: The price movement has been choppy, showing potential for either a breakout or breakdown.

VXX (Volatility Index)

Analysis of Market Volatility and Investor Sentiment

Significant Spikes/Drops: VXX has shown some upward movement, suggesting an increase in market volatility. This could be an indicator of nervousness among investors.
Impact on SPY and QQQ: A rising VXX typically implies a bearish outlook for SPY and QQQ. The recent increase in volatility could preface a downturn in these indices if investor sentiment does not improve.

Sector Analysis

Sector ETF Performance Over the Past 30 Days

Strong Sectors:
- XLE (Energy): Has shown resilience with consistent upward price movements, likely due to rising oil prices.
- XLV (Health Care): Demonstrated strong performance with stable upwards trends.
- XLK (Technology): Fluctuated but overall maintained a bullish stance potentially driven by positive earnings results in tech companies.
Weak Sectors:
- XLC (Communication Services): Exhibited downward pressure, likely due to competitive pressures and regulatory concerns.
- XLRE (Real Estate): Struggled to maintain price levels amidst rising interest rates.

Sector Rotation:
– Recent data indicates a rotation out of defensive sectors like Consumer Staples (XLP) and Utilities (XLU) into cyclical sectors such as Energy (XLE) and Financials (XLF).

Key Levels to Watch

SPY

Support Levels:
- 560.00 – A critical psychological level.
- 555.50 – Recent intraday low.
Resistance Levels:
- 565.00 – Recent high.
- 570.00 – Psychological barrier.

QQQ

Support Levels:
- 470.00 – Key support level from recent lows.
- 465.00 – Secondary support level.
Resistance Levels:
- 475.00 – Immediate resistance.
- 480.00 – Recent high.

Scenarios

Bullish Scenario

SPY and QQQ:
– Economic Data: Positive economic data such as strong employment numbers or GDP growth could drive the indices higher.
– Earnings Reports: Outstanding earnings reports from tech giants and key sectors.
– Technical Breakout: If SPY breaks above 570.00 and QQQ above 480.00 with strong volume, it could signal a bullish rally.

Bearish Scenario

SPY and QQQ:
– Negative Economic News: Poor economic data or revisions, such as a slowdown in consumer spending or industrial output.
– Geopolitical Tensions: Escalating geopolitical issues could harm investor sentiment.
– Technical Breakdown: Breach of critical support levels (SPY below 555.50 and QQQ below 465.00) could trigger a downturn.

Overall Commentary

The overall market is showing some cautionary signs, with rising VXX levels indicating increased volatility and nervousness among investors. SPY and QQQ are both at critical junctures, where they could either move higher upon breaking above resistance levels or decline if they fail these tests and fall through support levels. Sector analysis suggests a rotation into cyclicals while defensive sectors are losing strength. Traders should be cautious but watchful for potential breakout opportunities in the Energy and Tech sectors, while also keeping an eye on support levels for signs of a broader market downturn.