Market Analysis

SPY|QQQ Wednesday 1PM 6/19/2024

June 19, 2024 4 min read

Market Sentiment Analysis

Overall Market Sentiment:

SPY (S&P 500 ETF):
Based on the recent 13 bars on the 30-minute intraday chart for the past 30 days, SPY appears to show a moderated upward momentum. The last observed prices and volumes are as follows:

The prices in the recent 13 bars indicate a slight upward trend with a consistent closing price around $548.60 – $548.90.
The volume has seen a decrease towards the end with a peak observed at 30,261 and dropping down to 6,580 near the end, indicating reduced trading activity.

Overall, the moving averages might hint that the increasing prices paired with low volumes could push the SPY into a more bullish territory, but caution should be taken due to the declining volume.

QQQ (Nasdaq-100 ETF):
Similarly, QQQ shows a steady price rise in recent 13 bars:

The observed closing range is in a slightly higher bracket from $485.44 to $485.76.
Noticeably, volume reaches its peak at 26,815 and recedes to 11,821, suggesting lower trading activity at the higher bracket.

Like SPY, QQQ’s momentum indicators hint towards a bullish sentiment but diminishing volume could lead to reduced momentum sustainability.

VXX (Volatility Index):
VXX appears largely stable with minor fluctuations:

Prices generally hover around $11.13 to $11.18 with very low volume, indicating complacency in the market as traders are not heavily hedging for volatility.
Lower volatility is generally a positive sign for SPY and QQQ, hinting at a bullish sentiment for these indices in the foreseeable period unless sudden spikes are seen.

Sector Analysis:

Performance Overview:
– Strength: XLC (Communication Services) and XLY (Consumer Discretionary) both maintain solid close prices indicative of sector strength. Strong volumes and price closes near highs indicate bullish sentiment.
– Weakness: XLU (Utilities) and XLE (Energy) show sluggish price movements with relatively low trading volumes, indicating weak sector appeal currently.

Sector Rotation:
Sector rotation seems evident; strong sectors are likely gaining investor favor. XLC and XLY’s strength reflect a bullish appetite for growth-oriented sectors, while traditionally defensive sectors like XLU and XLE face outflows.

Key Levels to Watch:

SPY:
– Support: Recent support observed around $548.40.
– Resistance: Key resistance at $548.90 – $549.00.

QQQ:
– Support: Close support identified at $485.55.
– Resistance: Close resistance at $485.90.

Scenarios:

Bullish Scenario:
For SPY and QQQ, a continuation of the current upward price trend could push indices higher if supported by:
– Positive macroeconomic data such as higher-than-expected GDP growth.
– Strong corporate earnings reports particularly in tech and communication sectors.
– Technical breakouts above mentioned resistance levels, supported by an increase in volume.

Bearish Scenario:
Indices could see downturns if impacted by:
– Negative economic news, e.g., increasing inflation rates or labor market woes.
– Geopolitical tensions causing market fear.
– Technical breakdowns below identified support levels, coupled with increased volumes signaling panic selling.

Overall Commentary:

The general market sentiment tilts towards cautious optimism with SPY and QQQ holding slight bullish undertones, evidenced by the upward price trends albeit under reduced volume. Sector analysis also points to a focus on growth-oriented areas while defensive sectors lag. Traders should keep an eye on key support and resistance levels. The low volatility as suggested by VXX consolidates the sentiment of a stable market unless disrupted by unanticipated events.