Market Analysis

SPY|QQQ Tuesday 1PM 2/03/2026

February 3, 2026 3 min read

Market Sentiment Analysis

Overall Market Sentiment

SPY (S&P 500 ETF):
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– 30-minute Chart Analysis: Over the past 30 days, SPY shows a consistent trend of gradual upward movement with occasional pullbacks. The recent 13 bars show a decline with higher volumes which could indicate selling pressure. The price is currently below its short-term moving averages, suggesting a potential bearish sentiment in the near term.
– Volume Trends: There is increased volume activity in the recent bars, possibly indicating a stronger belief in the recent trends, possibly leading to a continuation of the current direction.

QQQ (Nasdaq-100 ETF):
– 30-minute Chart Analysis: Over the last 30 days, QQQ has demonstrated a directional movement similar to SPY. The recent price action reveals a downward trend, possibly exacerbated by technology sector weaknesses. Prices recently moved below key moving averages, signaling possible short-term bearish sentiment.
– Volume Trends: Increasing volume on a downswing points to potential further declines, reflecting a cautionary stance among traders.

VXX (Volatility Index):
– Volume and Price Movement: The recent spike from 26.92 to 28.05 suggests growing market volatility and fear, commonly associated with bearish market sentiment. This increase may lead to heightened caution and selling in broader markets such as SPY and QQQ.

Sector Analysis

Strong Performing Sectors: XLP (Consumer Staples) and XLU (Utilities) have shown relative stability, indicating defensive sector strength amidst market volatility. This trend could suggest a shift towards safety among investors.
Sector Rotation: There is a noticeable move from high beta sectors like XLY (Consumer Discretionary) and XLK (Technology) towards more defensive sectors such as XLU and XLP. This rotation hints at increased caution in the market, as investors may be seeking refuge from anticipated volatility or downturns.

Key Levels to Watch

SPY:
– Support Levels: Crucial support around 680 could act as a safety net. A break could lead to further downslides.
– Resistance Levels: Near-term resistance sits at around 695, which needs to be breached convincingly for upward momentum.

QQQ:
– Support Levels: Watch for support near 610; a breach could trigger a larger sell-off.
– Resistance Levels: Approximately 625 represents the current cap; breaking through could signal a bullish reversal.

Scenarios

Bullish Scenario:
– SPY and QQQ: A bullish breakout could be fueled by unexpected strong earnings reports, easing geopolitical tensions, or positive economic data like increased consumer spending. A successful breach of key resistance levels could reinforce this sentiment.

Bearish Scenario:
– SPY and QQQ: Continued negative global economic indicators, increased geopolitical strife, or technical breakdowns (especially breaking recent support levels) may lead to declines. Rising VXX further substantiates such concerns.

Overall Commentary

In conclusion, the overall market reveals a cautious sentiment underscored by increased volatility as evident in VXX and sector rotations toward defensive positions. While critical supports for SPY and QQQ remain intact, breaches could signal further declines. Momentum appears negative for the short-term, but any infusion of positive macroeconomic data or corporate earnings could reverse this trend. Traders are urged to remain vigilant of key levels as markets navigate heightened uncertainty.