SPY|QQQ Wednesday 1PM 2/04/2026

February 4, 2026 3 min read

Market Sentiment Analysis

Overall Market Sentiment:

SPY (S&P 500 ETF)

Price Movement: Over the recent 13 bars (half-hour intervals), SPY has remained relatively stable with a slight upward momentum. Noteworthy is the significant bullish candlestick seen on the 14:30 bar, where strong buying interest pushed the price to $688.27 and closed slightly lower.
Volume Trends: There was a noticeable increase in volume at the 14:30 interval, suggesting heightened trading activity. However, the closing volume was lower, indicating potential profit-taking.
Moving Averages: If short-term moving averages were included, SPI’s positioning above these could signify continued short-term bullish momentum.

QQQ (Nasdaq-100 ETF)

Price Movement: QQQ mirrors SPY with upward price action, particularly significant in the 14:30 interval, which saw a sharp rise to $608.315.
Volume Trends: The volume spike around 14:30 indicates strong market interest, likely reflecting institutional positioning or significant investor activity driving the move.
Moving Averages: A similar pattern here would support the bullish momentum noted, with QQQ poised to potentially extend gains if moving averages are similar to SPY.

VXX (Volatility Index)

Volatility Insights: VXX exhibited a downward trend, closing at $27.62, suggesting waning fear or market risk sentiment. The sharp decline from $28.00 to $27.48 during the 14:30 bar coincides with bullish moves in SPY and QQQ, emphasizing investor confidence.
Impact on SPY and QQQ: As VXX decreases, expect continued support for bullish sentiment in major indices.

Sector Analysis:

Strong Sectors: Notable performance from XLK (Technology), XLI (Industrials), and XLY (Consumer Discretionary). These sectors saw increased buying interest towards the close, pointing to sector-specific strength and potential rotational plays into growth-oriented sectors.
Weak Sectors: XLU (Utilities) and XLP (Consumer Staples) exhibited lackluster movement, often indicating risk-on sentiment as investors pivot away from defensive sectors.
Sector Rotation Implications: The current environment suggests a tilt towards growth and cyclical sectors, potentially heralding market resilience.

Key Levels to Watch:

SPY

Support Levels: Immediate support is around $685.30, near recent lows, crucial for sustaining upward momentum.
Resistance Levels: Watch resistance at $688.50; a break above this could initiate further bullish movement.

QQQ

Support Levels: The critical support zone is $604.00, which aligns with intra-session lows, safeguarding continued upward pressure.
Resistance Levels: Key resistance is at $609.00; surpassing this can pave the way for additional gains.

Scenarios:

Bullish Scenario:

SPY and QQQ: A breakout above resistance levels, coupled with strong volume and catalyst events like favorable economic reports or earnings, might propel the indices further upwards. Watch for potential sector leadership from Technology and Consumer Discretionary in this scenario.

Bearish Scenario:

SPY and QQQ: A failure to maintain above key support levels due to unexpected geopolitical events or negative macroeconomic data could shift sentiment negative. In such instances, expect a potential retracement, especially if defensive sectors gain traction.

Overall Commentary:

The prevailing sentiment is cautiously optimistic with major indices, particularly SPY and QQQ, showing strength and growth sectors marking interest. The downtrend in VXX further supports this sentiment. Traders should monitor key support and resistance levels, given their influence on potential price movement. The sector rotation into riskier areas highlights current market confidence, though caution regarding volatility spikes or emerging news is advisable.