SPY, the SPDR S&P 500 ETF dipped -0.28% last week, while the VIX closed at 15.29, indicating a one day implied move range of +/-0.96% & a one month implied move range of +/-4.42%.
Their RSI is trending towards the overbought 70 mark & is currently at 63.05, while their MACD is bearish.
Volumes were +16.87% higher than the prior year’s average (74,194,000 vs. 63,483,745), which is cause for concern given that three of the week’s sessions resulted in declines.
Monday the week kicked off on a note of muted enthusiasm, as the session did not produce noteworthy volume but formed a bullish engulfing candle pattern with the previous Friday.
Tuesday the theme continued, as a bearish harami pattern emerged for SPY on the week’s second highest volume, setting the stage for the remainder of the week.
Wednesday opened lower & declined down to temporarily break through the 10 day moving average’s support, signaling that the strength in the sentiment behind the short-term trend is beginning to falter.
Thursday confirmed this when a gap down open below the 10 DMA was unable to recover to test its resistance & a spinning top candle emerged from the wreckage on the week’s strongest volume.
Friday opened on a gap up & the week ended on a +0.57% advance heading into the weekend on lackluster volume.
While SPY managed to close just above the 10 DMA’s support, the low participation rate among investors signals that there is quite a bit of uneasiness emerging in the market.
Heading into the new week the upside case remains as it has been for months now, in order to continue seeing new all time highs we will need strong advancing volume that is consistent, particularly now that the 10 day moving average is beginning to show signs of weakness.
The consolidation case looks a bit like what we witnessed beginning last week, where SPY will oscillated around the 10 day moving average awaiting an upside or downside catalyst, which this week may come in the form of a Government shutdown in the US, earnings calls that show weakness among the consumer (Nike, food companies etc…) or data that hints at employment troubles, which is something market participants have had on their mind of recent following the FOMC interest rate decision from two weeks ago.
To the downside the first area to watch is the 50 day moving average in the event that the 10 DMA breaks down, as it is currently in a price zone with limited historic data on volume sentiment making it a wild card.
Should it break down, the $638.08/share support levels is in a zone that is historically Seller oriented (1.24:1), which may find SPY being led down to $617.58/share.
This brings the support zone of $605.47-607.90/share into focus, as they are the top two points of a consolidation range of November 2024-February 2025.
The table below has more details on SPY’s historic volume sentiment.
SPY has support at the $660.98 (10 Day Moving Average, Volume Sentiment: NULL, 0:0*), $642.81 (50 Day Moving Average, Volume Sentiment: NULL, 0:0*), $638.08 (Volume Sentiment: Sellers, 1.24:1) & $617.58/share (Volume Sentiment: Buyers, 1.8:1) price levels, with resistance at the $662.37 (Volume Sentiment: NULL, 0:0*) & $667.34/share (All-Time High, Volume Sentiment: NULL, 0:0*) price levels.
QQQ, the Invesco QQQ Trust ETF fell -0.56% last week, having the second worst week of the major index ETFs.
Their RSI is trending back towards the overbought 70 mark, currently at 64.18, while their MACD is bullish, but flat & their histogram is showing signs of weakness.
Volumes were +42.07% higher than the previous year’s average (59,092,000 vs. 41,409,402), which like SPY is cause for concern due to the declining sessions of the week & the breakdown of the 10 day moving average’s implied weakness.
Monday the week kicked off advancing higher on the week’s third highest volume, which was the highest advancing volume session.
Tuesday showed the same weakness as SPY, when QQQ saw profits taken & a flight to safety by market participants on the week’s second highest volume.
Wednesday the declines continued & the 10 day moving average’s support was tested, but was able to hold up & still serve as support.
Thursday opened on a gap down to below the 10 day moving average, signaling that there was a lack of faith in the short-term moving average.
The day tested to below the $590/share level, but was able to temporarily break above the 10 DMA’s resistance & closed higher than it opened, all on the week’s highest volume, indicating that there was uncertainty & people are feeling uneasy.
Friday opened in-line with the 10 DMA, tested lower to the $590-level, but was able to rally higher to close above the 10 DMA, but the weak volume behind the move signals that there is still quite a bit of uncertainty & fear in the market.
Heading into the new week QQQ’s case looks much like SPY’s & is similar on the upside as its been for months, to continue making new all-time highs we will need to see continued, sustained higher advancing volume as confirmation that there is confidence behind these moves up.
The consolidation case remains similar as well, where we will watch the see QQQ oscillate around the 10 DMA & possibly between it & the 50 DMA while awaiting an upside or downside catalyst.
In terms of a move downwards the 50 DMA will also be an area of importance in the coming week(s) as it resides in a Seller dominated zone historically, and in the event that it breaks down the next support levels is the gatekeeper to the $560-569.99/share price zones which are also historically in favor of Seller activity, which leads us to $558.19 & $551.04.
The latter is also in a Seller zone & is the gatekeeper to the gap up that’s gone unfilled from June of 2025, which is not the most supportive of near-to-mid-term pictures.
QQQ has support at the $595.01 (10 Day Moving Average, Volume Sentiment: NULL, 0:0*), $582.64 (Volume Sentiment: Buyers, 2:0*), $575.26 (50 Day Moving Average, Volume Sentiment: Sellers, 1.3:1) & $573.96/share (Volume Sentiment: Buyers, 1.79:1) price levels, with resistance at the $596.30 (Volume Sentiment: NULL, 0:0*) & $602.87/share (All-Time High, Volume Sentiment: NULL, 0:0*) price levels.
IWM, the iShares Russell 2000 ETF declined -0.67% last week, as the small cap index was the least favored among the four majors.
Their RSI is trending higher towards overbought conditions & currently sits at 59.27, while their MACD is bearish following Tuesday, Wednesday & Thursday’s declines.
Volumes were +24.39% higher than the prior year’s average (39,332,000 vs. 31,620, 876), which shares similar concerns with SPY & QQQ in a rare overlap between the three indexes, except IWM’s advancing session on Monday was the strongest volume performance of the week.
Monday the week opened lower, tested lower, but found legs & rallied on the week’s highest volume to close just below the $245/share level after temporarily crossing above it.
Tuesday opened at $245.01 & ran up as high as $247.18, a new all-time high, before profit taking sank IWM’s ship & forced decline heading into the close on the week’s second highest volume.
Wednesday the pain continued for IWM & the small caps, as the high end of the day didn’t even make it to $245 & it declined down to within striking distance of the support of the 10 day moving average.
Thursday the wheels came off & IWM opened on a gap down below the 10 day moving average’s resistance, tested as low as $237.55/share, but was able torecover to close below the 10 DMA but higher than its opening price of the day.
Friday was relatively quiet, as the week’s lowest volume session opened higher & gained +0.86% heading into the weekend, but was unable to close above the 10 day moving average’s resistance, indicating that the near-term trendline is losing power.
Heading into the new week the upside case is the same as SPY & QQQ’s, but is also stronger if they’re also reaching new all-time highs, as IWM tends to follow them from a slightly slower pace & the market is relatively in a full court press.
The consolidation case also slightly hinges on the other three major indexes, but it follows the logic of oscillating around the 10 DMA & in between it & the 50 DMA as it draws nearer & we await an upside or downside catalyst.
To the downside, the 50 DMA is the first major test given that it is going to continue marching higher for some time& setting a resistance levels wherever it settles when price is able to climb high enough to catch it.
The $226.07-228.90 zone is going to be important for support, particularly as the $224-227.99/share price zone is the weakest Buyer dominated level aside from the $232-235.99/share zone, which increases the likelihood of a breakdown once price enters it.
In the event that prices decline that far, the 200 day moving average enters the picture, and the long-term trend line is going to become a more important part of the near-term outlook based on IWM’s historic performance.
IWM has support at the $239.79 (Volume Sentiment: Buyers, 2.1:1), $237.55 (Volume Sentiment: Buyers, 2.1:1), $230.29 (50 Day Moving Average, Volume Sentiment: Buyers, 1.27:1) & $228.90/share (Volume Sentiment: Buyers, 1.27:1) price levels, with resistance at the $241.41 (Volume Sentiment: ), $242.35 (Volume Sentiment: Buyers, 0.4:0*) $247.18/share (Volume Sentiment: NULL, 0:0*) price levels.
DIA, the SPDR Dow Jones Industrial Average ETF stumbled -0.14%, having the best week of the majors.
Their RSI is climbing higher at 61.4, while their MACD is currently bearish but flat.
Volumes were +35.2% higher than the prior year’s average levels (4,674,000 vs. 3,457,012), which is problematic given the top three highest volume sessions came on declines.
DIA’s week began on a bullish engulfing candle pattern, but it was on the week’s lowest volume & it showed that there was appetite to test the support of the 10 day moving average, which means folks were getting antsy.
The next day opened higher, hit a new all-time high at $467.00, but steadily declined on the highest volume of the week throughout the rest of the session as market participants took profits down from the table.
Wednesday the theme continued with DIA being unable to break above $465/share & closing in-line with the supporat of the 10 day moving average.
Thursday the cracks began to show in the blue chip index, as DIA opened on a gap down below the 10 day moving average, on the week’s second highest volume.
Friday the week ended on an underwhelming attempt at optimism, with a gap up open in-line with the 10 MDA that dipped lower before climbing higher to close as a spinning top, indicating that there was still more indecision among market participants & that conviction was still among the missing.
Heading into the new week the upside case is the same as all of the three above, without sustainable increased volume levels to the upside confidence looks to be lacking in this current environment, making further upside moves look untrustworthy.
The consolidation case features oscillations around the 10 DMA & possibly between the 10 & 50DMA’s as they draw nearer to one another.
To the downside, all eyes go to the 50 DMA as well, followed by the zone between $445-445.28/share, as should that break down DIA enters a Seller dominated zone atop another Seller zone that begins at $436/share, making the 200 day moving average then within striking distance.
DIA has support at the $460.97 (10 Day Moving Average, Volume Sentiment: NULL, 0:0*), $450.53 (50 Day Moving Average, Volume Sentiment: Buyers, 2.9:1), $448.70 (Volume Sentiment: Buyers, 2.09:1) & $445.28/share (Volume Sentiment: Buyers, 2.24:1) price levels, with resistance at the $463.41 (Volume Sentiment: NULL, 0:0*) & $467.00/share (Volume Sentiment: NULL, 0:0*) price levels.
The Week Ahead
Monday the week begins with Pending Home Sales data at 10 am.
Carnival reports earnings Monday morning before the session opens, followed by Jefferies, Progress Software & Vail Resorts after the closing bell.
S&P Case-Shiller Home Price Index (20 Cities) data comes out at 9 am Tuesday, before Chicago Business Barometer (PMI) data at 9:45 am and Job Openings & Consumer Confidence data at 10 am.
Tuesday morning begins with earnings from Lamb Weston, Paychex & United Natural Foods, before Nike reports after the closing bell.
Wednesday morning features ADP Employment data at 8:15 am, S&P Final U.S. Manufacturing PMI data at 9:45 am, and Construction Spending & ISM Manufacturing data at 10 am.
Acuity, Cal-Maine Foods, Conagara & RPM Inc. all report earnings before Wednesday’s opening bell, before Levi Strauss reports after the session’s close.
Initial Jobless Claims data comes out Thursday at 8:30 am, followed by Factory Orders data at 10 am.
Thursday morning features earnings from AngioDynamics.
Friday ends the week with U.S. Employment Report, U.S. Unemployment Rate, U.S. Hourly Wages & Hourly Wages Year-over-Year data at 8:30 am, before S&P Final U.S. Services PMI data at 9:45 am & ISM Services data at 10 am & there are no major earnings reports scheduled for release.
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 ***