Market Analysis

SPY|QQQ Thursday 4PM 8/01/2024

August 1, 2024 4 min read

Market Sentiment Analysis

Overall Market Sentiment

SPY (S&P 500 ETF)

Analysis of the 30-minute intraday chart for the past 30 days:
– Volume Trends: The last 13 bars show a significant volume spike, particularly in the third bar from recent, which coincides with a rapid upward price movement. The volume tapered off but remained slightly above the average in the last few bars.
– Moving Averages: The recent price action stays above the 50-period MA on the 30-minute chart, indicating short-term momentum is positive.
– Notable Price Movements: The ETF moved from 539 to a high of 543 within a short timeframe and is consolidating around 540-541, indicating potential bullish flag formation.

Overall, SPY shows strong bullish momentum with healthy volume supporting the recent price increases.

QQQ (Nasdaq-100 ETF)

Analysis of the 30-minute intraday chart for the past 30 days:
– Volume Trends: Volume spiked notably in the third and fourth most recent bars, indicating strong institutional buying interest.
– Moving Averages: Recent price action is well above the 50-period MA, demonstrating strong short-term bullish momentum.
– Notable Price Movements: The ETF displayed a sharp move from 456 to around 460 before some profit booking occurred.

QQQ exhibits strong bullish sentiment with upward momentum and supported volume.

VXX (Volatility Index ETF)

Analysis for assessing market volatility:
– Volume Trends: VXX experienced substantial volume during the market correction intraday but settled down towards the end of the session.
– Price Movements: The VXX spiked from 50 to 52 and volatility tapered back down to around 51, indicating a short-lived fear spike and a return to normalcy.

VXX displays a minor panic sell-off but stabilized, suggesting the market can absorb shocks comfortably.

Sector Analysis

XLC (Communication Services): Showed moderate bullish momentum with a consistent price climb from 85.58 to 86.00. Volume spikes in the last 7 bars suggest institutional accumulation.

XLY (Consumer Discretionary): Displayed volatile upward movement with significant volume spikes, indicating a higher risk appetite among investors.

XLP (Consumer Staples): Represented steady upward momentum supported by higher volume, indicating safe-haven buying.

XLE (Energy): Strong upward trajectory supported by volume spikes, suggesting a rotation into energy.

XLF (Financials): Steady ascent with rising volume, indicating stability and accumulation.

XLV (Health Care): Gradual but consistent upward movement with moderate volume, indicating safe sector rotation.

XLI (Industrials): Strong upward momentum with consistent volume spikes, indicating bullish sector rotation.

XLK (Technology): Strong bullish sentiment with significant support from volume, suggesting tech remains a market favorite.

XLB (Materials): Gradual upward momentum supported by consistent volume, signaling moderate sector strength.

XLRE (Real Estate): Moderately strong upward movement with sporadic volume spikes, suggesting selective accumulation.

XLU (Utilities): The strong upward movement and volume spikes indicate defensive sector rotation.

Key Levels to Watch

SPY

Support: 539.00
Resistance: 543.00
Critical Levels: 535.00 (major support from prior consolidation), 545 (potential breakout level)

QQQ

Support: 456.00
Resistance: 460.00
Critical Levels: 455.00 (major support), 465.00 (potential breakout level)

Scenarios

Bullish Scenario (SPY and QQQ):

SPY: A break above 543 resistance with strong volume could see SPY testing 545, with catalysts being strong earnings reports or positive economic data.
QQQ: A move above 460 resistance could see QQQ targeting 465, driven by robust tech earnings or favorable economic indicators.

Bearish Scenario (SPY and QQQ):

SPY: A drop below the 539 support level could lead SPY to retest 535, possibly driven by negative economic news or geopolitical tensions.
QQQ: Breaking below 456 could trigger a downward move towards 455, influenced by poor tech sector earnings or adverse market sentiment.

Overall Commentary

The market sentiment is predominantly bullish, with both SPY and QQQ showing strong upward momentum supported by healthy volume. Sector analysis indicates a rotation into traditionally safe sectors like Utilities (XLU) and Consumer Staples (XLP), but also sustains interest in growth sectors like Technology (XLK) and Industrials (XLI). Key levels will be critical in determining the next move, with a slight propensity towards bullish continuation, barring any significant economic or geopolitical disruptions.