Market Analysis

SPY|QQQ Tuesday 8AM 12/09/2025

December 9, 2025 3 min read

Market Sentiment Analysis

Overall Market Sentiment

SPY (S&P 500 ETF):
– Price Movement: The recent 13 bars of SPY on the 30-minute chart indicate a slight decline but stability around critical levels with prices hovering near 684. The recent price movement shows SPY tested a new intraday low but managed to recover slightly toward the close.
– Volume Trend: Volume picked up initially in the recent bars but then declined, possibly indicating a lack of strong conviction from either bulls or bears at current price levels.
– Moving Averages: Depending on the moving averages used (e.g., 20-bar and 50-bar), crossing signals are essential. A potential crossover on shorter timeframes might indicate increased volatility to follow.

QQQ (Nasdaq-100 ETF):
– Price Movement: QQQ has displayed a flat to slightly declining trend within the last 13 bars, indicating uncertainty or consolidation. The close prices suggest a minor downtrend from the highs, with resistance around 624.75.
– Volume Trend: The volume appears sporadic, indicating indecisiveness within the last trading phases. This combination with price action could either be a pause before a breakout or breakdown.
– Moving Averages: As with SPY, the relative position of shorter and longer period averages will give clues about potential trend shifts.

VXX (Volatility Index):
– Volatility Status: VXX displays low and stable levels, suggesting that market volatility remains subdued, and investors are not aggressively hedging long positions.
– Recent Activity: The lack of significant spikes in VXX implies that any downside risk in SPY or QQQ could be evaluation-related rather than driven by panic selling.

Sector Analysis

Top Sectors: Within the last 30 days, the stand-out sectors appear to be XLC (Communications) and XLK (Technology), showing resilience and minor gains relatively.
Sector Rotation: There’s no evident aggressive sector rotation, but interest in defensive sectors like XLP (Consumer Staples) might suggest caution.
Implications: As technology (XLK) remains relatively strong, QQQ might find support despite broader index pressure. Conversely, any real rotation into defensive sectors could foreshadow more evocative cyclical downturns.

Key Levels to Watch

SPY:
– Support Levels: Key support is around 683, a critical psychological level recently tested without breaching.
– Resistance Levels: A significant resistance level is around 685-686, which if broken with high volume might signal bullish conviction.

QQQ:
– Support Levels: Watch for support around the 623.50 levels, previously held firm.
– Resistance Levels: The resistance zone of 625-626 acts as the main cap for recent rallies.

Scenarios

Bullish Scenario:
– SPY and QQQ: A bullish scenario would involve strong economic data, potentially better-than-expected earnings reports, or a decisive technical breakout above resistance levels with accompanied volume increase. Positive geopolitical developments might also support a rally.

Bearish Scenario:
– SPY and QQQ: A bearish outlook could be driven by negative economic reports (e.g., rising jobless claims, inflation concerns), geopolitical tensions, or breaks below support. Watch for increased VXX activity, projecting rising fear.

Overall Commentary

The overall market sentiment remains teetering between cautious optimism and guarded pessimism. Volume and price movements suggest consolidation, with both tops and bottoms being tested but not decisively broken. The minor strength in technology supports QQQ resilience while defensive postures in consumer staples suggest caution. Traders should watch for conviction and volume in any breakout or breakdown scenarios and be prepared for sudden sentiment shifts marked by VXX spikes.