Market Analysis

SPY|QQQ Thursday 1PM 6/13/2024

June 13, 2024 4 min read

Market Sentiment Analysis:

Overall Market Sentiment:

SPY (S&P 500 ETF):

Analysis of 30-minute intraday chart (past 30 days with emphasis on recent 13 bars):
– Volume Trends: There has been a significant uptick in trading volumes especially in the last 2-3 bars.
– Moving Averages: The 13-bar moving average suggests a slightly bullish momentum as recent prices have been closing above the average in the past few bars.
– Notable Movements: The recent 13 bars displayed consolidation with a slight upward bias; there were brief moments of higher intraday volatility, but the prices generally stayed strong above 540.

Overall Sentiment: Bullish momentum appears to be building. The increase in volume with slight upward price bias indicates that buyers are gaining confidence.

QQQ (Nasdaq-100 ETF):

Analysis of 30-minute intraday chart (past 30 days with emphasis on recent 13 bars):
– Volume Trends: Volumes have been consistent but saw a spike around the 12th bar signaling increased activity.
– Moving Averages: The moving averages indicate consolidation but with a slightly bullish tone as the prices have recovered quickly from intraday lows.
– Notable Movements: Similar to SPY, recent bars showed consolidation with some buying pressure given that the prices have remained mostly above 475.

Overall Sentiment: The momentum appears cautiously optimistic. The quick recovery from dips and snapping back to the high points signify that investors are inclined towards the upside.

VXX (Volatility Index):

Examination of VXX intraday chart:
– Spikes/Drops: Over the last 30 days, there haven’t been significant spikes; rather VXX has been relatively stable, indicating calm in market volatility.
– Impact on SPY and QQQ: Stability in VXX suggests that the current bullish bias in both SPY and QQQ could persist in the near term as there’s no major fear factor influencing the market.

Overall Sentiment: Low volatility implies a market sentiment that is stable and supportive of a continued gradual bullish trend.

Sector Analysis:

Strong Sectors:
– XLK (Technology): Performance has been strong compared to others with recent recoveries showing resilience.
– XLY (Consumer Discretionary): Consistent performance and steady closing highs over recent periods.
– XLI (Industrial): Solid performance and recovery to intraday highs show underlying strength.

Weak Sectors:
– XLU (Utilities): Underperformed with lower highs and volume, indicating less interest from investors.
– XLE (Energy): Slightly bearish due to consistent lower lows.

Sector Rotation Implication:
– Tech, Consumer Discretionary, and Industrials leading suggests confidence in growth-oriented areas. Utilities and Energy lagging imply less defensive positioning, suggesting a risk-on sentiment overall.

Key Levels to Watch:

SPY:

Support Levels: 539, 536
Resistance Levels: 542, 545

A breach below 536 could signify a step-down while crossing 545 could propel a bullish breakout.

QQQ:

Support Levels: 474, 471
Resistance Levels: 477, 480

Watching 471 is crucial for holding the bullish stance, while breaking through 480 could see aggressive buying.

Scenarios:

Bullish Scenario:

SPY and QQQ:
– Driving Factors: Positive economic data, stronger-than-expected earnings reports, and breaking above critical resistance levels (SPY above 545, QQQ above 480).
– Technical Signs: Sustained volume with higher highs, and moving averages staying robust above support levels.

Bearish Scenario:

SPY and QQQ:
– Driving Factors: Deteriorating economic conditions, unexpected geopolitical tensions, and daily breakdowns below key support levels (SPY below 536, QQQ below 471).
– Technical Signs: Increasing volume on downward moves, breaks below moving average supports, and failed attempts to rally past resistance.

Overall Commentary:

The current overall market environment appears cautiously optimistic. Volatility remains low which is supporting the steady upward bias seen in both SPY and QQQ. Strong sector performances in Technology, Consumer Discretionary, and Industrials further validate a growth-focused sentiment, suggesting current market conditions are generally favorable for upward momentum. Traders and investors should remain vigilant at the key support and resistance levels identified, as breaches could dictate near-term movements significantly.