Market Analysis

SPY|QQQ Tuesday 8AM 8/13/2024

August 13, 2024 3 min read

Market Sentiment Analysis:

Overall Market Sentiment

SPY (S&P 500 ETF):
Over the past 30 days, the SPY has exhibited a relative uptrend on its 30-minute intraday chart. However, it is the most recent 13 bars that garner the most attention for short-term trading. Analyzing these, the price began at $535.28 and saw various movements, culminating at $535.35. Key takeaways include:

Volume Trends: Steady but not overly enthusiastic volume, peaking notably at the $534 range.
Moving Averages: Short-term moving average dips suggest some slight corrections within the day but recover, holding above key supports.
Price Movements: The recent high of $535.99 indicates resistance, while $533.29 serves as local support.

QQQ (Nasdaq-100 ETF):
Similar to SPY, QQQ has demonstrated an upward trend with notable short-term volatility.

Volume Trends: Increasing volume towards the last few bars, indicating growing interest, especially around $453.15.
Moving Averages: A consistent pattern holds above moving averages, though closely aligned, hinting at potential rapid directional changes.
Price Movements: Recent prices touched a high of $455.65 with notable resistance at this level and support around $451.042.

VXX (Volatility Index):
VXX presents an interesting view into market sentiment, given that spikes in VXX generally indicate increased fear or uncertainty.

Recent Spikes/Drops: Noteworthy spike to $55.00 in the recent bars, suggesting heightened market concern and perhaps an impending pullback in SPY and QQQ.
Volume Observations: Increasing volumes generally hint at accumulation phases, implying rising volatility expectations.

Sector Analysis

Evaluating sector ETFs over the past 30 days reveals the current market hotspots and rotations:

Strong Sectors:
- XLC (Communication Services): Consistent stable volumes and rises in price, touching highs near $84.72.
- XLK (Technology): Maintaining a steadiness around $208-$209, supported by strong volumes, is a positive indicator.
Weak Sectors:
- XLY (Consumer Discretionary): Minor fluctuations with low volumes hint at less confidence.
- XLP (Consumer Staples): Price stagnation around $78.80, indicating investors currently find it unattractive.

Key Levels to Watch

SPY:

Support Levels: $533 (short-term), $529 (long-term)
Resistance Levels: $536, $540

QQQ:

Support Levels: $451 (short-term), $448 (long-term)
Resistance Levels: $455, $460

Scenarios

Bullish Scenario:
For both SPY and QQQ, a combination of strong economic data, positive quarterly earnings, and technical breakouts above $536 (SPY) and $455 (QQQ) could potentially drive prices higher. A positive catalyst could be positive unemployment or GDP figures, signaling economic resilience.

Bearish Scenario:
Conversely, negative economic news such as disappointing earnings, unfavorable Fed commentary, or escalation in geopolitical tensions could prompt a breakdown below $533 (SPY) and $451 (QQQ). High VXX levels serve as a caution for potential pullbacks.

Overall Commentary:

The current market environment reflects cautious optimism, with key indices exhibiting upward trends but also showing vulnerability to market sentiment shifts, as indicated by the VXX’s recent movements. Sector performance highlights strength in Technology (XLK) and Communication Services (XLC), which may continue to attract capital in the short term. Traders should closely monitor key support and resistance levels and be prepared for swift adjustments based on economic news and volatility indicators.