SPY|QQQ Thursday 1PM 6/27/2024

June 27, 2024 3 min read

Market Sentiment Analysis:

Overall Market Sentiment:

SPY (S&P 500 ETF):

Based on the SPY 30-minute chart for the past 30 days, and focusing on the recent 13 bars:

Price Movement: The price has shown a slight upward trend with minor fluctuations. The close price has managed to stay above the opening price, signaling a minor bullish sentiment.
Volume Trends: The volumes have been inconsistent but generally trending lower, suggesting a decrease in trading interest or a consolidation phase. A notable spike in volume at 11:30 suggests a significant trading interest at that level.
Moving Averages: Short-term moving averages (like the 10-period) likely show an upward trend reinforcing bullish sentiment supported by volume at crucial price points.

QQQ (Nasdaq-100 ETF):

For QQQ over the recent 13 bars:

Price Movement: The price shows a narrow range consolidation with a slight upward bias. The price closing slightly above the opening signals optimism.
Volume Trends: Similar to SPY, QQQ also displayed inconsistent volume, with a notable volume increase at 11:30 and a gradual tapering off.
Moving Averages: Short-term moving averages should mirror those of SPY with an upward drift, contributing to a cautiously bullish outlook.

VXX (Volatility Index):

An analysis of VXX:

Price Movement: VXX has shown a stable trend with slight downward movements, closing mostly unchanged.
Volume Trends: Volume spikes correlate with the start of trading sessions, implying higher activity during volatile periods.
Market Sentiment Implication: Low volatility, suggested by VXX, aligns with a less fearful market. This low volatility typically indicates bullish sentiment or market complacency.

Sector Analysis:

Based on the sector ETFs’ performance over the past 30 days:

Strong Sectors:
- XLY (Consumer Discretionary): Showed strength with an upward trend and reasonable volume, signaling consumer confidence.
- XLK (Technology): Exhibited substantial resilience and slight upward momentum. A primary driver of growth in the overall market.
- XLI (Industrials): Held steady with minor gains, suggesting optimism in industrial investments.
Weak Sectors:
- XLRE (Real Estate): Displayed weakness with lower highs, indicating softness in the real estate sector.
- XLV (Health Care) and XLF (Financials): Flat to declining trends, suggesting market caution in these defensive sectors.

Key Levels to Watch:

SPY:

Support Levels: Key support at $544.00 (historical pivot and volume-shown interest).
Resistance Levels: Resistance around $546.00, tested multiple times but has yet to break convincingly.

QQQ:

Support Levels: $479.00 appears to be a strong support level.
Resistance Levels: Around $481.70, seen as a near-term resistance point.

Scenarios:

Bullish Scenario:

For SPY and QQQ:

Drivers: Strong economic data (e.g., GDP growth, low unemployment), robust earnings reports, and positive corporate guidance. Technical breakouts past the highlighted resistance levels would indicate sustained momentum.
Outlook: Look for moving averages to continue upward slopes and volume spikes above resistance levels as confirmation.

Bearish Scenario:

For SPY and QQQ:

Drivers: Negative economic news, geopolitical tensions, or an unexpected rise in inflation rates. A break below the key support levels could trigger further selling.
Outlook: Increased volume on down moves and moving averages turning downward would reinforce bearish sentiment.

Overall Commentary:

The current market sentiment leans cautiously bullish, supported by steady trends in major indices and low volatility levels. The technology and consumer discretionary sectors are leading the charge, while real estate and health care show caution. Key levels in SPY and QQQ could determine the next market direction in the short term, with aspirational breakouts signaling continued bullish trends and potential breakdowns suggesting caution.

Traders should be wary of volume trends to confirm moves and look for macroeconomic triggers to align with technical signals.