Market Analysis

SPY|QQQ Wednesday 4PM 8/28/2024

August 28, 2024 4 min read

Market Sentiment Analysis

Overall Market Sentiment:

SPY (S&P 500 ETF):
– 30-Minute Intraday Chart (Past 30 Days):
– Volume Trends: Over the past 13 bars, there has been considerable fluctuation in volume, with notable spikes indicating periods of high trading activity. The highest volume observed was during the last trading session, suggesting heightened market activity or reaction to news/events.
– Moving Averages: The data suggests that SPY has been adhering closely to its short-term moving averages. Any consistent crossing above longer-term moving averages could signal potential bullish momentum.
– Recent Price Movements: The price movement has shown a steady climb, peaking at 559.36 before a minor pullback to close at 556.31. The sharp drop during the last session could indicate profit-taking or a reaction to external factors, but without a massive selloff volume.

Sentiment: Tentatively Bullish, but the last session’s decrease may warrant caution.

QQQ (Nasdaq-100 ETF):
– 30-Minute Intraday Chart (Past 30 Days):
– Volume Trends: Similar to SPY, QQQ experienced significant volume during the last few trading sessions, indicating active market participation.
– Moving Averages: Indications are that QQQ has been riding above its short-term moving averages. This is a continued bullish sign unless there’s a breakdown below these averages.
– Recent Price Movements: The price hit a high of 472.77 before a sharp decline to close at 468.24. Similar to SPY, this could suggest a temporary pullback or profit-taking rather than a reversal.

Sentiment: Cautiously Bullish, with attention required on the next few sessions’ developments.

VXX (Volatility Index):
– 30-Minute Intraday Chart (Past 30 Days):
– Volume Trends: VXX experienced considerable volume spikes in the last trading sessions, typically indicating increased hedging or concern about market volatility.
– Recent Price Movements: The VXX shows a somewhat stable price around 47, with minor fluctuations. No significant spikes or drops were noted in the last session.

Sentiment: Neutral to Slightly Bearish; the lack of a dramatic rise in VXX despite market movements suggests limited fear or panic among investors.

Sector Analysis:

Top Performers:
– XLY: Consumer Discretionary ETF has shown resilience and strong performance, with a consistent climb in price over the past 30 days.
– XLK: Technology ETF also exhibits strong performance, with reliable upward momentum.
– XLRE: Real Estate shows steady gains, echoing stability in the sector.

Weaker Performers:
– XLE: Energy sector is seeing minimal movements, indicating stagnation.
– XLP: Consumer Staples, though stable, lacks significant upward momentum, suggesting investors might prefer sectors with better growth prospects.

Sector Rotation:
– There’s noticeable interest shifting towards consumer discretionary and technology, signifying confidence in continued economic recovery and growth in these sectors.

Key Levels to Watch:

SPY:
– Support: 554.87 (recent low), 550.00 (psychological support)
– Resistance: 559.36 (recent high), 560.00 (psychologically significant if crossed)

QQQ:
– Support: 466.43 (recent low), 465.00 (psychological).
– Resistance: 472.77 (recent high), 475.00 (next potential psychological target).

Scenarios:

Bullish Scenario:
– SPY and QQQ: A continued rise in economic data (e.g., employment numbers, GDP growth) and positive earnings results could propel the ETFs higher. Technical breakouts above the mentioned resistance levels (559.36 for SPY and 472.77 for QQQ) on strong volume would affirm bullish sentiment.

Bearish Scenario:
– SPY and QQQ: Negative economic news, escalating geopolitical tensions, or an unexpected rise in volatility could lead to a downturn. Breaking below support levels (554.87 for SPY and 466.43 for QQQ) would indicate potential bearish momentum and increase selling pressure.

Overall Commentary:

The overall market sentiment is cautiously bullish, supported by generally positive developments in key sectors like technology and consumer discretionary.
Recent volume spikes and price movements suggest investors are active, but caution needs to be exercised, especially given the minor pullbacks during the last trading sessions.
Watching key support and resistance levels in the coming days will be critical to understanding whether the current bullish trend can be sustained or if a pivot is imminent.