Market Analysis

SPY|QQQ Wednesday 8AM 7/24/2024

July 24, 2024 3 min read

Market Sentiment Analysis:

Overall Market Sentiment:

SPY (S&P 500 ETF):

The 30-minute intraday chart of SPY over the past 30 days shows a moderate upward trend. However, focusing on the recent 13 bars (last 6.5 hours), we observe a mixed sentiment. Significant volume was observed around 549.18 – 550.30, indicating strong support and resistance zones. The moving averages indicate a slight consolidation around the 549.89 level, with volumes slightly decreasing over the last few candles, indicating potential indecisiveness in the market.

QQQ (Nasdaq-100 ETF):

Similarly, the QQQ exhibited a strong performance over the past 30 days. However, the last 13 bars hint at volatility. Significant volume spikes around 474.44 – 476.18 suggest heavy trading and possible support levels. The moving averages maintain an upward momentum, albeit with slight consolidation hints similar to the SPY. The recent selling pressure suggests potential caution among traders.

VXX (Volatility Index):

The VXX showed fluctuations, peaking notably at 44.21, indicating increased market volatility. This rise in VXX could suggest growing concern or uncertainty among investors, which might reflect in potential pullbacks in both SPY and QQQ if sustained. Elevated volume spikes, particularly at higher peaks, suggest strong investor reactions to underlying market events.

Sector Analysis:

Strong Performers:

XLC (Communication Services): Despite recent dips, XLC shows recovery above 84.32. Stable volumes suggest continued interest in this sector.

XLY (Consumer Discretionary): Moderate performance, with dips but consistent recovery. Trading around 185.2897 indicates interest.

XLK (Technology): Near consistent movements around 223.55, experiencing minor corrections but showing resilience—indicative of continued investor confidence.

Weak Performers:

XLB (Materials): Minor dips observed with movements around 90.77, indicating vulnerability to market shifts.

XLRE (Real Estate): Fluctuations around 40.51 – 40.87 suggest caution, with investors possibly viewing this sector as riskier compared to others.

Key Levels to Watch:

SPY:

Support Levels:
– 549.18
– 549.37

Resistance Levels:
– 550.46
– 550.90

Critical levels show potential breakouts or breakdowns around the 550 mark, influencing short-term momentum.

QQQ:

Support Levels:
– 474.42
– 475.22

Resistance Levels:
– 476.01
– 477.50

Fluctuations around 474-476 are critical; breaching above or below could dictate short-term trends.

Scenarios:

Bullish Scenario:

SPY & QQQ: Positive economic data, strong earnings reports especially in the tech sector, and technical breakouts above 550 for SPY and 476.50 for QQQ could drive the market higher. If the recent volumes convert into broader buying pressure, expect upward momentum.

Bearish Scenario:

SPY & QQQ: Negative economic news, geopolitical tensions, or technical breakdowns through key supports (SPY below 549, QQQ below 474) could lead to downturns. VXX sustaining above 44 would corroborate bearish sentiment.

Overall Commentary:

The market sentiment appears cautiously optimistic but is exhibiting signs of potential volatility as reflected in the VXX and mixed performances within key sectors. Technology and Communication Services seem robust, but Materials and Real Estate show relative weakness. Upcoming economic data and earnings could set the tone for the next movements. Traders should monitor the key support and resistance levels closely while considering the possible impact of rising volatility indicated by VXX on market direction.