Market Analysis

SPY|QQQ Thursday 4PM 6/13/2024

June 13, 2024 3 min read

Market Sentiment Analysis:

Overall Market Sentiment:

SPY (S&P 500 ETF):
The recent 13 bars on the SPY’s 30-minute intraday chart indicate a mix of steady price movement with bursts of volume. Close price was stable oscillating in the range of 541.25 to 542.20 without any sharp moves, and the volume spikes align with key price movements. The volume appears to be highest at the end of the trading day around 7889795, suggesting accumulation rather than distribution.

Moving Averages: The short-term moving averages (e.g., 5-period and 13-period) are likely converging, indicating a potential breakout or breakdown.
Price Movements: Price has maintained above key support levels and tried to test resistance near the highs around 543.325.

QQQ (Nasdaq-100 ETF):
The QQQ displayed a similar pattern to the SPY with recent bars reflecting stable price action and notable volume at significant price points. The close stayed within the range of 476.49 to 476.71 predominantly. Volume spikes appeared intermittently, particularly near end-of-day, although not as pronounced as SPY.

Moving Averages: Moving averages are either flattening out, hinting at consolidation, or poised for crossover indicating a momentum play soon.
Price Movements: Prices are largely stable with only minor upticks and downgrades, staying restrained within 477.32 as a probable short-term resistance.

VXX (Volatility Index):
The VXX showed minimal volatility with slight dips and spikes in the close range, typically around 10.88 – 10.95. There’s no significant outlier suggesting impending high volatility in the market.

The constrained movement in VXX hints at a lack of fear or drastic volatility expected by investors in the very short term.

Sector Analysis:

Reviewing the performance of sector ETFs:

Strong Sectors:
– XLC (Communication Services): Validates short-term strength staying around the ranges of 83.89 to 84.04, nearly touching highs.
– XLK (Technology): Indicates potential with prices oscillating tightly within 226.01 to 226.73, signaling stability and a poised move.

Weak Sectors:
– XLE (Energy): Showed declining movements resting around the lower bounds with regular intervals.

Notable Sector Rotation:
– Movement towards Technology and Communication Services may indicate rotation out of defensive sectors like XLU (Utilities) and XLE (Energy), suggesting investors’ risk-on attitude.

Key Levels to Watch:

SPY:
– Support: Key level to watch would be around 541.25 – 541.00.
– Resistance: Observing any break above 543.33 could spark further bullish movements.

QQQ:
– Support: Key level to maintain attention around 476.49 – 476.10.
– Resistance: Watch for attempts to breach 477.32 where consolidation sets precedence.

Scenarios:

Bullish Scenario:
– SPY & QQQ: Positive economic data or upbeat earnings could enhance bullish sentiment. Technically, a breakout from consolidation ranges or upwards moving average crossovers will provide momentum. An increase in volume overtaking recent highs would confirm a steeper bullish path.

Bearish Scenario:
– SPY & QQQ: Negative news on economic fronts or geopolitical tensions can dampen sentiment. Technically, a breakdown from key support levels like those identified could lead to further declines, particularly validated with higher than average volume on downward movements.

Overall Commentary:

The market remains in a state of poised consolidation with SPY and QQQ showing stable movement and minor volume peaks. Sector rotation suggests a risk-on sentiment driving focus towards technology and communications. The present technical setup is indicative of potential breakouts and breakdowns aligning with inflection economic data points or geopolitical events. Traders should keenly observe the provided levels for actionable setups, this conservative but aware stance aligns well with the volume and price movements observed.