SPY, the SPDR S&P 500 ETF dipped -0.34% last week, most caused by Tuesday’s gap down session, as the S&P 500 struggled to recover from the loss later in the week.
Their RSI is trending downwards towards neutral & sits at 63.05, while their MACD is slightly bearish entering the new week.
Volumes were -8.25% below average last week compared to the year prior (75,026,700 vs. 81,771,964), which should be seen as a cause for concern, given that the highest volume session of last week was Tuesday’s gap down, followed by Friday’s risk off into the weekend session.
Monday set the stage for the week’s decline with as a new 52-week high resulted in a doji candle with the open & closing prices in the lower end of the day’s range.
Tuesday resulted in a gap down session that straddled the 10 day moving average’s support, ultimately closing below it on the day, as another doji session signaled that there is still much uncertainty among market participants, including about the strength of the 10 DMA’s support.
Tuesday’s high volume signaled that profits were being taken & folks have become a bit uneasy now at these levels & this deep into earnings season.
Wednesday’s session signaled some optimism & began filling the window created by Tuesday’s gap, but the 10 DMA’s strength was still uncertain, as the day opened just above it, tested lower, but ultimately advanced further.
Thursday saw further advances & set up what would be an evening star pattern if we were at lower price levels & each day was not so tight-range near the all-time highs & Friday was risk off decline into the weekend.
As noted prior, Friday saw the second highest volumes of the week & ended the week just above the 10 day moving average.
Investors this week will want to keep an eye on how strong it holds up as support, as well as to see if a new ATH is able to be set, as otherwise this market looks set to let off some steam & seems ripe for profit taking.
Their Average True Range has flattened out, as there has been a lack of volatility over the past few weeks, aside from Tuesday’s gap down.
SPY has support at the $497.93 (10 Day Moving Average; Volume Sentiment: NULL, 0:0*), $490.71 (Volume Sentiment: NULL, 0:0*), $479.63 (50 Day Moving Average; Volume Sentiment: NULL, 0:0*) & $477.55/share (Volume Sentiment: NULL, 0:0*) price levels, with resistance at the $503.50/share (All Time High; Volume Sentiment: NULL, 0:0*) price level.
QQQ, the Invesco QQQ Trust ETF declined -1.48% last week, as the technology heavy index was the least favored by market participants for the week.
Their RSI is trending downwards towards neutral & sits at 57.87, while their MACD is currently bearish & trending lower following Tuesday’s gap down.
Volumes were -8.7% below average compared to the year prior (47,049,060 vs. 51,553,969), which comes with the same warnings as SPY, given that their highest volume day was also on Tuesday’s gap down, followed by Friday’s session.
Monday reached a new all-time high briefly, before trending lower on the day & signaling uncertainty among market participants by closing the day out as a spinning top candle.
Tuesday began the picking apart of the 10 day moving average’s support, as the session gapped down to open below it, tested lower, but did ultimately test going back above the 10 DMA, before closing higher than it opened right in line with the 10 DMA.
Wednesday gave a third spinning top candlestick of the week, signaling that investors had become rather cautious & are unsure if QQQ would be able to advance higher, as the session opened on top of the 10 DMA, tested lower, but ultimately was able to advance on the day.
Thursday flashed the brake lights for QQQ, as the day resulted in a dragonfly doji, which can signal a continued march higher, had it not been a weak volume session, but the 10 day moving average managed to maintain its support.
Friday things began to unravel for QQQ, as the day opened slightly lower, declined below the 10 day moving average & had the second highest volume of the week, indicating that most investors are beginning to think about taking more profits off of the table in the near-term.
This week the 10 & 50 day moving averages will be important to keep an eye on, particularly if the 10 DMA becomes resistance, as they will eventually be closing in on the price from the top & bottom & likely be the cause of the next breakout (up or down).
Their Average True Range is flat, due to a lack of volatility recently, but after the earnings reports on Wednesday (NVDA in particular) this should begin to trend upwards again as volatility picks up.
QQQ has support at the $432.01 (10 Day Moving Average; Volume Sentiment: NULL, 0:0*), $429.85 (Volume Sentiment: NULL, 0:0*), $425.33 (Volume Sentiment: NULL, 0:0*) & $416.79/share (Volume Sentiment: NULL, 0:0*) price levels, with resistance at the $439.14/share (All-Time High; Volume Sentiment: NULL, 0:0*) price level.
IWM, the iShares Russell 2000 ETF advanced +1.16% last week, having the strongest week of the major indexes as investors sought smaller market cap names.
Their RSI is trending downward towards the neutral level & currently sits at 56.89, while their MACD is currently bullish, but looks to be curling over bearishly over the coming few days.
Volumes were +54.23% above average last week compared to the year prior (53,319,320 vs. 34,572,181), which looks to be primarily due to profit taking after a week of IWM jumping around with gaps up/down every session.
Much like SPY & IWM, Tuesday’s gap down session had the most volume of the week, followed by Friday’s declining session, which is not indicative of good investor sentiment.
Monday began the week on a gap up session that covered a wide range of prices, following in the wake of last Friday’s gap up.
Tuesday on the other hand showed great weakness, as profit takers overwhelmed IWM following three straight days of large advances.
Tuesday blew through the support of the 10 day moving average, but closed right at the 50 DMA, despite having dipped below its support level during the day.
Wednesday opened at the high level of Tuesday’s upper shadow, but declined down to test the 10 DMA’s support before edging higher on the day’s session.
Thursday gapped higher on a wide-range session, was unable to test the 52-week high set in December & set the stage for declines when Friday’s session formed a bearish harami pattern, while the day resulted in a spinning top, indicating uncertainty.
As noted prior, the high levels of volume occurring after these advancing sessions are signals of weakness in the market, as participants are more eager to collect their profits & get off the field, rather than risk losses at these high price levels.
IWM’s Average True Range has been dipping lower the past few sessions, but it looks primed to go higher as volatility looks to be increasing for the small cap index.
All eyes this week for IWM will be on the $199.41 support level, their MACD as it begins to curl over bearishly, and the strength of support that the 10 & 50 day moving averages can provide, as they are two of the next three support levels.
IWM has support at the $199.41 (Volume Sentiment: Buyers, 1.67:1), $197.71 (10-Day Moving Average; Volume Sentiment: Buyers, 1.21:1), $197.10 (Volume Sentiment: Buyers, 1.21:1) & $195.50/share (50-Day Moving Average; Volume Sentiment: Buyers, 1.46:1) price levels, with resistance at the $204.76 (Volume Sentiment: Buyers, 5:1) & $205.49/share (All-Time High; Volume Sentiment: Buyers, 5:1) price level.
DIA, the SPDR Dow Jones Industrial Average ETF remained mostly flat last week, only gaining +0.02% as investors have become more cautious as we sit at all-time high price levels.
Their RSI is currently trending downwards towards the neutral level & sits at 58.32, while their MACD is currently bearish & declining further.
Volumes were +5.69% above average last week compared to the year prior (3,694,440 vs. 3,495,700), which like all of the aforementioned index ETFs is on account of Tuesday’s high volume declining session & Friday’s declining session as well, as investors raced to get profits off of the table.
Monday set the week off on an ominous note with a shooting star candlestick on very low volume.
Tuesday opened below the strength of the 10 day moving average & only tested lower throughout the session, but managed to close midway through the day’s candle, resulting in a long lower-shadow.
Wednesday the uncertainty continued, with a dragonfly doji candle that closed lower than it opened, which while it was technical an advancing session from Tuesday, did not wind up anywhere near the resistance that the 10 DMA was now providing.
Thursday gapped higher & had a wide-range candle with only a tiny lower shadow (compared to recent sessions), but the volume levels did not indicate that there was enthusiasm among investors, although the session did close above the 10 day moving average.
Friday wound the week down with a spinning top that closed just above the support of the 10 day moving average, signaling uncertainty, but the day’s low did dip below the 10 DMA & the volume was rather high on this day, signaling bearish sentiment.
Much like the other indexes mentioned prior, DIA’s 10 & 50 day moving averages will be an area of focus this week as they both approach the price closely & have begun to round off as though rolling over into declines in the near-term.
They will also be important for DIA as once they’ve been broken through by the price, there are no support levels otherwise until ~9% from Friday’s closing price.
Their ATR is flat/slightly declining, as their chart shows that there has been hardly any volatility for DIA in quite some time.
DIA has support at the $385.91 (10-Day Moving Average; Volume Sentiment: NULL, 0:0*), $380.46 (Volume Sentiment: NULL, 0:0*), $377.13 (50-Day Moving Average; Volume Sentiment: NULL, 0:0*) & $353.33 /share (Volume Sentiment: Buyers, 2.22:1) price levels, with resistance at the $389.41/share (Volume Sentiment: NULL, 0:0*) price level.
The Week Ahead
Monday will be quiet next week as it is President’s Day in the US, so there will be no data releases, nor earnings reports.
Tuesday brings us U.S. Leading Economic Indicators at 10 am.
Home Depot, Walmart, Alcon, Amplitude, Andersons, Barclays, Beyond, Inc., Caesars Entertainment, Celanese, CenterPoint, Chesapeake Energy, Choice Hotels, Community Health, Cushman & Wakefield, Diamondback Energy, DigitalBridge, Element Solutions, Equitrans Midstream, Expeditors International of Washington, Flowserve, Franco-Nevada, Fluor, Globus Medical, Graphic Packaging, Halozyme Therapeutics, International Flavors & Fragrances, JBT Corp, KBR, Keysight Technologies, La-Z-Boy, Matador Resources, Matterport, Medifast, Medtronic, NeoGenomics, Palo Alto Networks, Pan Am Silver, Public Storage, Realty Income, SolarEdge Technologies, Sun Communities, Teladoc, Toll Brothers, TRI Pointe Homes, UFP Industries, Visteon & Westlake Corporation are all scheduled to report earnings on Tuesday.
Atalanta Fed President Raphael Bostic speaks at 8 am & the Minutes of the Fed’s January FOMC meeting are released on Wednesday at 2pm.
NVIDIA, Alamos, Analog Devices, ANSYS, Avista, B2Gold, Bally’s, Bausch + Lomb, Camping World, Canadian Natural Resources, Cheesecake Factory, Chesapeake Utilities, Chord Energy, Churchill Downs, Clean Harbors, Coeur Mining, DigitalOcean, Dutch Bros, Etsy, Exact Sciences, Exelon, Fidelity National, First Majestic Silver, Forward Air, Garmin, Gildan Activewear, Glaukos, HF Sinclair, Host Hotels, Huntsman, Ionis Pharma, Jack In The Box, Jackson Financial, Kodiak Gas Services, LivaNova, Lucid Group, Marathon Oil, Marriott Vacations, Medical Properties Trust, Mister Car Wash, Mosaic, NiSource, Nordson, Olo Inc., ONE Gas, Photronics, Physicians Realty Trust, Pulmonx, Q2 Holdings, Range Resources, Rivian Automotive, Shutterstock, SM Energy, Sturm Ruger, Suncor Energy, Sunnova Energy, Sunrun, Synopsys, Tandem Diabetes Care, United Therapeutics, Valmont, Vimeo, Wingstop, Wix.com & Wolverine World Wide are all scheduled to report earnings on Wednesday.
Initial Jobless Claims are scheduled to be released Thursday morning at 8:30 am, followed by S&P Flash U.S. Services PMI & S&P Flash U.S. Manufacturing PMI at 9:45 am, Existing Home Sales at 10 am, at 3:15 pm Philadelphia Fed President Patrick Harker speaks & at 5 pm Minneapolis Fed President Neel Kashkari is scheduled to speak.
Thursday’s earnings reports include ACCO Brands, Alarm.com, Altair Engineering, American Homes 4 Rent, Arcadium Lithium, BigCommerce, BioMarin Pharmaceutical, Block, Booking Holdings, Brady, Builders FirstSource, Cars.com, Carvana, Cheniere Energy, Chuy’s, Clearway Energy, Copart, Coterra Energy, Dominion Energy, Edison, Enovis Corporation, Entergy, EOG Resources, Evolent Health, eXp World Holdings, Fiverr, Floor & Decor, Fox Factory Holding, Genco Shipping & Trading, Guardant Health, Harmony Biosciences, Hillman Solutions, Intellia Therapeutics, Intuit, Iron Mountain, iRhythm, Keurig Dr Pepper, LegalZoom.com, Live Nation, MercadoLibre, Moderna, Newmark Group, Newmont Goldcorp, NICE, Noble, Northern Oil & Gas, Nutrien, Oceaneering International, Pembina Pipeline, PG&E, Pioneer Natural Resources, Planet Fitness, Pool, Quanta Services, RE/MAX Holdings, Rocket Companies, Sleep Number, Sprouts Farmers Market, SPX Corp, Starwood Property Trust, TechnipFMC, Teck Resources, Teleflex, Trinity Industries, Universal Display, VICI Properties, Wayfair, Wheaton Precious Metals, XPEL & ZipRecruiter.
There are no major speakers or economic data reports due out next Friday.
Friday’s earnings calls include AerCap, Bloomin’ Brands, Docebo, Frontier Communications Parent, Gray Television, Lamar Advertising, RB Global, Scripps, Sunstone Hotel, TransAlta & Warner Bros. Discovery.
See you back here next week!
*** I DO NOT OWN SHARES OR OPTIONS CONTRACT POSITIONS IN SPY, QQQ, IWM OR DIA AT THE TIME OF PUBLISHING THIS ARTICLE ***