SPY, the SPDR S&P 500 ETF added +1.74% this week, while the VIX closed at 20.78, indicating an implied one day move range of +/-1.31% & an implied one month move range of +/-6.01%.
Their RSI is just above the neutral 50-mark & sits currently at 53.42, while their MACD is still bearish.
Volumes were +39.15% higher than the prior year’s average (91,420,000 vs. 65,697,291), with Thursday’s declining session leading the week in terms of highest volume level.
Monday the week began on a slightly optimistic note, as a bullish harami pattern formed with Friday’s massive declining candle, but on one of the lowest volume sessions of the week, indicating hesitency on the part of market participants.
Tuesday opened lower, tested lower to down by the support of the 50 day moving average, before climbing higher to take a stab at the 10 day moving average’s resistance & closed higher than it opened, but still down -0.12% day-over-day.
Wednesday opened on a gap up in-line with the 10 day moving average’s support, temporarily broke out above it intraday, but ulimately closed lower than it opened after making a run down below the $659/share level.
Volumes also remained lackluster.
Thrusday again opened in-line with the 10 day moving average’s resistance, temporarily broke out above it, before Sellers stepped in majorly & forced a -0.68% decline on the strongest volume of the week.
A mixture of pessimism & profit taking led to the day’s decline, as was noted by Friday’s session, where a down open resulted in a gain of +0.57% that closed in-line with the 10 day moving average’s resistance.
Heading into a new week the upside case revolves around SPY’s price first being supported by the 10 DMA & establishing some advancing volume as a foundation to make a run at their all-time high of $673.95/share.
The consolidation case looks a lot like what we saw last week, where SPY oscillated between the 10 & 50 day moving averages awaiting an upside/downside catalyst.
The downside case gets interesting should the support of the 50 DMA break down, as that & the next support levels below are still relatively untested & the following level of support sits in a price zone favored by Sellers historically (1.25:1).
This leaves $617.58/share as the gatekeeper separating SPY from a support zone established from a late 2024/early 2025 consolidation range.
The real concerning issue at hand is that this then brings the 200 Day moving average’s support into the picture, which opens up the potential risk of a breakdown in the long-term trendline.
SPY has support at the $653.53 (50 Day Moving Average, Volume Sentiment: NULL, 0:0*), $653.17 (Volume Sentiment: NULL, 0:0*), $638.08 (Volume Sentiment: Sellers, 1.25:1) & $617.58/share (Volume Sentiment: Buyers, 1.8:1) price levels, with resistance at the $665.35 (10 Day Moving Average, Volume Sentiment: NULL, 0:0*) & $673.95/share (All-Time High, Volume Sentiment: NULL, 0:0*) price levels.
QQQ, the Invesco QQQ Trust ETF advanced +2.45% for the week, faring the strongest of the major index ETFs.
Their RSI is 56.08 & trending higher, while their MACD remains bearish following the previous Friday’s declines.
Volumes were +57.78% higher than the previous year’s average (68,176,000 vs. 43,210,438), with two of the top three highest days being declining volume, which is something to consider when trying to ascertain the current market sentiment.
Monday the week opened similar to SPY with a bullish harami pattern forming with Friday’s large bearish engulfing candle, setting the tone for a similar consolidation range.
Tuesday opened on a gap lower, retreated down to take a shot thought the $590/share level, but found support at $590.13/share.
Wednesday opened on a gap higher, temporarily broke out above the resistance of the 10 day moving average, but saw profit taking force QQQ below $600/share temporarily, and ultimately close lower than the session opened.
Thursday saw QQQ open on another gap higher, test a little higher intraday, before profit taking & risk aversion forced prices lower on the day down -0.68%.
The week wound down on the highest volume session of the week, where QQQ opened on a gap down & was able to trudge higher to close just above the support of the 10 DMA.
Much like SPY, QQQ’s near-term future relies heavily on the strength of the support of the 10 DMA, as without it making another run at their all-time high is impossible.
As has been noted several times over the past months, there will also need to be more advancing volume to support any runs at all-time highs as well if they are to remain sustainable, with QQQ’s current high water mark being $613.18, a +1.53% advance from Friday’s closing price.
The consolidation case looks like a continuation of last week, where QQQ oscillates around & in between the 10 & 50 day moving averages.
QQQ’s downside case is also similar to SPY’s in that the 50 day moving average’s support is in focus & climbing higher.
The $582.64 mark is also going to be of importance as a support level, as should that give out QQQ enters a Seller dominated zone historically at $575-579.99, which has one Buyer zone buffering it from the Seller zones of $560-564.99 & $565-569.99/share, which is prices decline to those levels a bearish head & shoulders pattern will emerge.
QQQ has support at the $603.00 (10 Day Moving Average, Volume Sentiment: NULL, 0:0*), $590.13 (50 Day Moving Average, Volume Sentiment: NULL, 0:0*), $586.98 (Volume Sentiment: NULL, 0:0*) & $582.64/share (Volume Sentiment: Buyers, 2:0*) price levels, with resistance at the $613.18/share (All-Time High, Volume Sentiment: NULL, 0:0*) price levels.
IWM, the iShares Russell 2000 ETF gained +2.36% last week, as the small cap index was second fiddle to the tech-heavy NASDAQ.
Their RSI is trending down towards the neutral 50-mark & currently sits at 51.84, while their MACD has been bearish & unable to break out above the signal line since the third week of September.
Volumes were +44.34% higher than the previous year’s average (47,022,000 vs. 32,578,088), which should be cause for concern given that the two highest volume sessions were the declines of Thursday & Friday.
Much like SPY & QQQ, IWN started the week off forming a bullish harami pattern with a giant declining candle from the previous Friday’s session on the week’s lightest volume, but was able to close above the 10 day moving average’s support.
Tuesday opened on a gap lower, tested lower to almost $240/share, before ripping through the 10 DMA again, making a run at the $250/share level & ultimately forming a bullish engulfing pattern day-over-day.
Volumes remained underwhelming & Wednesday confirmed that there was indeed much in the way of concern among market participants.
Wednesday opened on a gap up above IWM’s all-time high, setting a new all-time high at $252.77/share, but forming a high wave doji for the day, indicating that there was a tight battle between bulls & bears that resulted in agreement being made at ~$250.30-36 based on open & closing prices.
It should also be noted that although subtle, Wednesday’s session did close lower than it opened, setting the stage for the end of the week’s slide.
Tursday saw things begin to unwind for IWM, as a gap up open quickly turned into profit taking mania that saw IWM temporarily break down below the support of the 10 day moving average, and market participants were eager to take risk off of the table.
Friday the small cap names also had a tough time, opening on a gap lower & on the highest volume of the week being unable to break above the resistance of the 10-day moving average which they’d just recently been soaring above on the highest volume of the week.
Everybody was looking for the exit & capital preservation came to the fore walking into the weekend.
Heading into a new week the upside case is strangely similar to SPY & QQQ’s, IWM needs to break above the 10 DMA, establish support with the help of some increased advancing volume & then make a run at the all-time high.
The consolidation case at this stage will feature oscillations between the 10 & 50 day moving averages, awaiting an upside or downside catalyst; if the 10 or the 50 DMA become favored & oscillated around you may find a clue about what’s coming next, particularly should they spread apart.
The downside case for IWM becomes interesting, as zooming out & taking in the 1 year daily chart there could be a head & shoulders pattern emerging with Wednesday being the head & there are some interesting gaps left unfilled from since June, making the moving averages an important place to focus.
The 10 DMA has already broken down, making the 50 DMA the next most important, particularly as they become closer together & a trend reversal occurs.
The way that IWM advances more slowly in almost creeping oscillations higher helps them by providing more support levels to rely upon vs. SPY or QQQ, but if there is a shock in the larger two indexes there is likely to be issues for their small cap counterparts.
IWM has support at the $242.35 (Volume Sentim8ent: Buyers, 0.4:0*), $239.79 (Volume Sentiment: Buyers, 2.1:1), $237.56/5 (*2, Volume Sentiment: Buyers, 2.1:1) & $237.33/share (50 Day Moving Average, Volume Sentiment: Buyers, 2.1:1) price levels, with resistance at the $245.17 (10 Day Moving Average, Volume Sentiment: NULL, 0:0*), $248.48 (Volume Sentiment: NULL, 0:0*) & $252.77/share (All-Time High, Volume Sentiment: NULL, 0:0*) price levels.
DIA, the SPDR Dow Jones Industrial Average ETF had the weakest week, climbing only +1.52%.
Their RSI has just crossed back above the neutral 50 mark & currently sits at 52.19, while their MACD is still bearish, having spent much of October that way.
Volumes were +100.98% higher than the prior year’s average (7,376,000 vs. 3,670,040), which is something tobehold & ponder, given that most of it came on Friday’s squeeze into the weekend advancing session.
Monday the week kicked off similarly to the other three majors, forming a bullish harami pattern with Friday’s candle on volumes that were lackluster vs the other sessions of the week.
Tuesday resulted in a bullish engulfing pattern that temporarily was able to break out above the resistance of the 10 DMA, but that also temporarily brokedown through the support of the 50 day moving average to the downside, as clearly some pro taken based on the week’s third highest volume.
Wednesday opened on a gap up, broke out temporarily above the $465/share level, but was unable to maintain the gains & broke towards $460/share but managed to settle lower than it opened & +0.00% on the day.
Thursday the cracksbegin to emerge though, as the week’s second highest volume saw DIA open just above the 10 DMA & proceed to slump below it & make a run down towards the 50 day moving average’s support.
Moving into a new week, the upside case is similar to the three majors above, sustained higher volume from advancing sessions is needed to push DIA back to new all-time highs, and a bearish pendant may be forming from the past month, which to overcome will require a strong push of volume to overcome the 10 DMA’s resistance.
The consolidation case is also the same as those above, look for oscillations between the 10 & 50 MAs until an upside or downside catalyst causes a breakout.
If the two moving averages begin to diverge you’ll be wise to follow which one price hugs most for clues into what comes next.
The downside case is also similar, but hinges upon if the “buy and hold” blue chip names see a bank run, where the 50 day moving average’s support comes into play as an important support levels, as if it doesn’t hold up the 10 DMA is already look at turning bearishly through it, sending DIA’s price lower in the short-term.
After the 50 day moving averagee, the gatekeeper support level to potential trouble is the $448.85/share level, as should that break down, the $436-439.99/share & the 440-443.99/share zones are both skewed towards Sellers historically, which also calls the long-term trendline into play, currently at $432.03.
DIA has support at the $456.61 (50 Day Moving Average, Volume Sentiment: NULL, 0:0*), $454.41 (Volume Sentiment: NULL, 0:0*), $448.55 (Volume Sentiment: Buyers, 2.09:1) & $445.13/share (Volume Sentiment: Buyers, 2.24:1) price levels, with resistance at the $462.33 (10 Day Moving Average, Volume Sentiment: NULL, 0:0*) & $470.22/share (All-Time High, Volume Sentiment: NULL, 0:0*) price levels.
The Week Ahead
Monday kicks the week off with U.S. Leading Economic Indicators at 10 am.
Cleveland-Cliffs reports earnings before Monday’s opening bell, followed by BOK Financial, Cadence Bank, Crown, RLI, Steel Dynamics, W.R. Berkley, Wintrust Financial & Zions Bancorp after the session’s close.
There is no major economic data due for release on Tuesday
Tuesday morning’s earnings calls include 3M, Badger Meter, Balchem, Coca-Cola, Community Financial System, Danaher, Elevance Health, Equifax, Forestar, GATX, GE Aerospace, General Motors, Halliburton, Lockheed Martin, Mattel, NASDAQ, Northrop Grumman, PACCAR, Pentair, Philip Morris International, PulteGroup, Quest Diagnostics, RTX & Valmont, followed by NetFlix, Agree Realty, Canadian National Railway, Capital One, Cathay Bancorp, Chubb, East West Banc, EQT, Fulton Financial, Manhattan Associates, Matador Resources, National Bank, Omnicom, Pathward Financial, Pegasystems, PennyMac, Texas Instruments, Vicor & Western Alliance Bancorp after the closing bell.
Wednesday will also be quiet on the economic data front.
Amphenol, AT&T, Avery Dennison, BankUnited, Boston Scientific, CME Group, GE Vernova, Healthcare Services Group, Hilton, Lennox International, Lithia Motors, M/I Homes, Moody’s, Northern Trust, OFG Bancorp, Old National Bancorp, PROG Holdings, Rogers Communications, Taylor Morrison Home, Teledyne Technologies, Thermo Fisher, Travel + Leisure, UniFirst, United Community Banks, Vertiv, Wabtec & Winnebago all report earnings Wednesday morning, followed by Alcoa, ASGN, Banc of California, CACI, Century Communities, Churchill Downs, Core Labs, Crown Castle, Equity Lifestyle Properties, Essential Properties Realty Trust, First American Financial, FirstEnergy, Globe Life, Goosehead Insurance, Graco, Helix Energy, Hexcel, International Business Machines, ICON, Kaiser Aluminum, Kinder Morgan, Knight-Swift, Lam Research, Las Vegas Sands, Lending Club, Medpace, Molina Healthcare, O’Reilly Automotive, Oceaneering International, Packaging, Plexus, QuantumScape, Raymond James, Reliance, Ribbon Communications, Robert Half, SAP, SEI Investments, Selective Insurance, Sonoco Products, Tesla, Texas Capital, United Rentals, Viking Therapeutics, Waste Connections, WD-40, WesBanco & Wyndham Hotels & Resorts after the closing bell.
Initial Jobless Claims data comes out Thursday at 8:30 am, followed by Existing Home Sales at 10 am.
Thursday morning begins with Allegion, AllianceBernstein, American Airlines, Ardagh Metal Packaging, Atlantic Union Bancshares, AutoNation, Blackstone, Bread Financial, Brunswick, Carpenter Technology, CBRE Group, CenterPoint, Darling Ingredients, Dover, Dow, Euronet, Expro Group, First Bancorp, FirstService, Freeport-McMoRan, FTI Consulting, Garrett Motion, Gentherm, Hasbro, Honeywell, IMAX, Integer Holdings, Iridium Communications, Lazard, Lindsay, Millrose Properties, Mobileye Global, MSC Industrial, Nokia, Old Republic, PG&E, Pool, Popular, Roper Technologies, Ryder System, Simply Good Foods, Sonic Automotive, STMicroelectronics, T-Mobile US, TechnipFMC, Teck Resources, Textron, Tractor Supply, TransUnion, TRI Pointe Homes, Union Pacific, Valero Energy, Valley National, Visteon & West Pharmaceutical Services on the earnings front, before Newmont, Alaska Air, Associated Banc-Corp, Baker Hughes, Community Health, Coursera, Customers Bancorp, Deckers Outdoors, Digital Realty Trust, EastGroup, Elme Communities, Enova International, First Financial Bancorp, Ford Motor, Healthpeak Properties, Hilltop Holdings, Intel, Kinsale Capital, Knowles, MaxLinear, McGrath RentCorp, Minerals Technologies, Nextracker, Norfolk Southern, Phillips Edison, Sallie Mae, SS&C Technologies Holdings, VeriSign, Western Union, World Kinect & WSFS Financial host their calls after the session’s close.
Friday begin with Consumer Price Index, CPI Year-over-Year, Core CPI & Core CPI Year-over-Year data at 8:30 am, before S&P Flash U.S. Services PMI & S&P Flash U.S. Manufacturing PMI data at 9:45 am & Consumer Sentiment (final) data at 10 am.
Booz Allen Hamilton, First Hawaiian, Flagstar Financial, General Dynamics, Gentex, HCA, Illinois Tool Works, Moog, Procter & Gamble, Sanofi & Stellar Bank all report earnings before Monday’s opening bell.
*** I DO NOT OWN SHARES OR OPTIONS CONTRACT POSITIONS IN SPY, QQQ, IWM OR DIA AT THE TIME OF PUBLISHING THIS ARTICLE ***