Market Analysis

SPY|QQQ Tuesday 4PM 7/16/2024

July 16, 2024 3 min read

Market Sentiment Analysis

Overall Market Sentiment

SPY (S&P 500 ETF):
Analyzing the 30-minute intraday chart for SPY over the past 30 days, we focus on the recent 13 bars’ price-volume development. The volume shows a significant spike in the final hour of trading, with closing prices slightly lower than the high, suggesting a possible resistance around the 565 level. The moving averages show the 30-minute candlesticks have revisited a previously held resistance but haven’t been able to close above it consistently, indicating caution among traders.

QQQ (Nasdaq-100 ETF):
In the case of QQQ, recent price action within the last 13 bars indicates a similar pattern of increased volume towards the close, coupled with a positive price movement. This suggests a moderate bullish sentiment. The price has tested highs but settled just below, highlighting a near-term resistance at the 496.73 level.

VXX (Volatility Index):
The VXX shows minor fluctuations with a slight upward trend in volume but not in price, indicating that investors are not highly concerned about spikes in volatility at this moment. However, maintaining vigilance is essential as any spike in VXX could shift market sentiment rapidly.

Sector Analysis:

Examining the sector ETFs’ performance over the past 30 days:

XLC (Communication Services): Stable with slight upward movement, indicating steady interest.
XLY (Consumer Discretionary): Shows strong gains, suggesting retail and discretionary spending optimism.
XLP (Consumer Staples): Slight uptick but relatively flat, indicating defensive positioning.
XLE (Energy): Mixed, with some upward movement but facing resistance, reflecting volatile energy prices.
XLF (Financials): Moderate gains, reflecting stable financial sector sentiment.
XLV (Healthcare): Generally stable with minor gains, indicating robust sentiment in healthcare.
XLI (Industrials): Shows resilience with steady gains, indicating optimism in the industrial sector.
XLK (Technology): Strong upward movement, leading among sector ETFs.
XLB (Materials): Slow but steady gains, indicating positive sentiment in this sector.
XLRE (Real Estate): Flat, indicating no significant movement.
XLU (Utilities): Stable but cautious, suggesting defensive stance prevailing.

Key Levels to Watch:

SPY:
– Support Levels: 564.00, 563.00
– Resistance Levels: 565.50, 566.00
These levels will be critical for setting stop-losses and profit-taking points over the next 1-3 days.

QQQ:
– Support Levels: 493.87, 494.00
– Resistance Levels: 496.73, 497.00
Monitor these levels closely for guidance on entry and exit points.

Scenarios:

Bullish Scenario:
For both SPY and QQQ, a bullish scenario could unfold if positive economic data releases and strong earnings reports come through. Technically, a strong breakout above their near-term resistance levels (565.50 for SPY and 496.73 for QQQ) could signal a further upward momentum. The sustainability of volume buildup could also reinforce the bullish stance.

Bearish Scenario:
A bearish scenario is likely if adverse economic news or geopolitical tensions emerge. Additionally, a technical breakdown below key support levels (564.00 for SPY and 494.00 for QQQ) could result in a short-term bearish trend. A significant uptick in VXX would reinforce caution.

Overall Commentary:

The overall market shows a neutral-to-bullish sentiment, with sector rotation favoring technology, healthcare, and consumer discretionary stocks. The financial sector also shows modest strength. Key levels in SPY and QQQ will provide guidance, with a bullish scenario likely led by positive macroeconomic indicators. Conversely, any negative shocks could quickly turn the sentiment bearish. Maintaining a vigilant approach toward VXX and sector performance will be crucial for swing traders over the coming days.