Author: OptimizedValue

SPY, the SPDR S&P 500 ETF gained +0.56% last week, while the VIX closed the week at 15.18, indicating a range of one day implied movement of +/- 0.96% & an implied one month range of movement of +/-4.39%.

Their RSI is trending back down towards the neutral 50 level, sitting currently at 58.95, while their MACD is still bearish, but could dolphin up above the signal line briefly this week.

Volumes were -13.63% lower than the prior year’s average (53,177,500 vs. 61,569,641), with both of the highest sessions of the week being declining volume, which paints a rather grim picture for the near-term.

Tuesday opened the week up on a gap down that tested lower, but was able to power higher & close above its open, but still for an intraday loss of -0.74%

Wednesday opened on a gap up to be in-line with the 1 day moving average, indicating that the short-term trendline was where market participants valued SPY, but tested lower & closed as a small bodied spinning top, indicating that there was confusion among market participants, particularly given that the day closed lower than it opened.

The low volume, but larger lower shadow than upper shadow also signal that there was a little bit of profit taking given the small size of the candle’s real body.

Thursday opened in-line with the 10 day moving average, but was able to advance; however it was on the weaknest volume for the week, which is not a sign of strength behind the move.

Friday opened on a gap higher temporarilyget a new all-time high, before tumbling down through the 10 DMA’s support while investors took profits, and it closed for a day-over-day loss of -0.29%.

Looking into the new week the upside case is the same as it has been for months now, in order to continue paving the road for higher all-time highs that have consistency and staying power we need a to form a base that is anchored by stronger advancing volume.

The consolidation case involved oscillations around the 10 day moving average & between the 10 & 50 DMAs once the 50 DMA draws nearer.

The downside case get’s interesting near the 50 day moving average, as it resides in a historic Sellers zone, and will be retested after some windows are closed from previous gaps, which will provide momentum behind the move.

Should the 50 DMA break down the next support levels is $619.29/share, which is the gatekeeper to the late 2024 to early 2025 consolidation zone.

SPY has support at the $645.39 (10 Day Moving Average, Volume Sentiment: NULL, 0:0*), $639.85 (Volume Sentiment: Sellers, 1.5:1), $633.14 (50 Day Moving Average, Volume Sentiment: Buyers, 1.33:1) & $619.29/share (Volume Sentiment: Buyers, 1.8:1) price levels, with resistance at the $562.21/share (All-Time High, Volume Sentiment: NULL, 0:0*) price levels.

QQQ, the Invesco QQQ Trust ETF advanced +0.89% on the shortened holiday week, as the tech-heavy index was the top performer of the four majors.

Their RSI has flattened at the 57.2 mark, while their MACD is bearish & approaching the signal line & may briefly dolphin above it in the coming week.

Volumes were -4.92% lower than the prior year’s average (37,965,000 vs. 39,931,115), which is not a particularly strong sign given 3/4 of the sessions last week were on advancing volume.

Tuesday the week kicked off on a note of weakness, with QQQ opening on a gap down in-line with the 50 day moving average, temporarily breaking below it, but rallying to close higher than it opened, but still down -0.84% on the day.

Wednesday opened on a gap higher in-line with the 10 day moving average, tested both above it & below it, but closed as a doji in-line with the open & 10 DMA, indicating that there was fair valuto for QQQ names seen in line with the short-term trendline.

Thursday opened in a similar spot, tested below the 10 DMA temporarily, but recovered to rally higher for a gain of +0.91% on the day.

Friday was the week’s highest volume session & warning lights were flashing, as a gap up open at $580.49 tested slightly higher, before crumbling down to the 10 DMA’s support as profits were taken off the board & closed higher than Thursday’s session, but below it’s opening price.

The session’s high volumes can be attributed to profit taking throughout the day, as indicated by the gap up falling apart.

Moving into a new week, ORCL earnings & CPI/PPI data willl be the primary catalysts up or dows for QQQ.

Again, there will need to be sustainable, higher levels of advancing volume for any moves higher beyond their current all-time high that have staying power.

The consolidation case currently looks like QQQ oscillated between the 10 & 50 DMAs while playing wait & see with the data points listed above.

To the downside all eyes should focus on the 10 DMA & awaiting its breakdown, as once thatoccurred it’s -1.34% until price tests the 50 DMA’s support.

In the event of that breakdown, the $558.84/share level becomes important, as it’s the gatekeeper to the $550-554.99/share level which is historically dominated by Sellers (1.28:1) & has no support levels beneath it for ~2%+, which creates a different landscape for QQQ’s fourth quarter.

QQQ has support at the $574.63 (Volume Sentiment: NULL, 0:0*), $572.29 (10 Day Moving Average, Volume Sentiment: NULL, 0:0*), $564.62 (50 Day Moving Average, Volume Sentiment: Buyers, 1.74:1) & $558.84/share (Volume Sentiment: Buyers, 6.25:1) price levels, with resistance at the $583.32/share (Volume Sentiment: NULL, 0:0*) price levels.

IWM, the iShares Russell 2000 ETF added +0.59% for the week, the second strongest showing among the four major index ETFs.

Their RSI is trending towards the overbought 70 level & currently sits at 66.65, while their MACD is bullish still, but its histogram is beginning to signal weakness on the horizon.

Volumes were -15.13% lower than the prior year’s average (25,995,000 vs. 30,628,645), which does not paint a rosy picture given that the week’s highest volume was one of the two advancing sessions; sentiment seems to be wavering.

Tuesday the week kicked off with a low volume session that opened on a gap lower, temporarily broke down the support of the 10 day moving average, before advancing to close higher than it opened, but down -0.54% on the day.

Wednesday opened lower, again tested the 10 DMA’s support, and again passed the test.

However, the size of the upper shadow show that the bulls were not in control, and that short term profit taking was occurring.

Thursday opened higher, in-line with he 10 day moving average, gained +1.25% on the day, but the story behind the move was weak, given that it occurred on the lowest volume session of an already low volume week.

Frdiday confirmed this, as the week’s highest volume session opened on a gap up, tested as high as $239.68 & as low as the 10 DMA, but support held up & the session closed as a doji.

The volumes account for a lot of profit taking in the near-term, and while the 10 DMA held up, market participants should view this as uneasiness moving into a new week.

The upside case for IWM remains the same as the weeks prior, with the other major indexes of large cap stocks so close to all-time highs, without the others moving on to new all-time highs, expect IWM to oscillate higher at the more steady pace than the others.

The consolidation case sees IWM oscillating around the 10 day moving average, as it awaits an upside or downside catalyst.

The 50 DMA is ~4% away, so that likely will not come into play this week, but perhaps next.

The downside here focuses on the 10 DMA’s support breaking down, which has remained resilient since mid-August.

Once thatbreaks down, the $229.55 & $226.04-226.71/share zone become the gatekeepers to the 50 day moving average retest & will be key areas to watch in the coming week.

It is also worth noting that the closer we get to the 50 DMA, the weaker Buyer sentiment has been historically, as shown in the table below.

IWM has support at the $235.07 (10 Day Moving Average, Volume Sentiment: Buyers, 1.18:1), $229.55 (Volume Sentiment: Buyers, 1.56:1), $226.71 (Volume Sentiment: Buyers, 1.06:1) & $226.04/share (Volume Sentiment: Buyers, 1.06:1) price levels, with resistance at the $240.47 (Volume Sentiment: Buyers, 0.4:0*) & $243.04/share (All-Time High, Volume Sentiment: Buyers, 0.4:0*) price levels.

DIA, the SPDR Dow Jones Industrial Average ETF inched forward +0.03% for the week, as the blue chip index was the least favored among market participants.

Their RSI is currently trending down towards the neutral 50 level & sits at 58.88, while their MACD is flat & likely to cross bearishly in the coming week.

Volumes were +3.11% higher than the prior year’s average (3,402,500 vs. 3,299,880), which shows that there was complacency in the market, especially given that the week was only four sessions.

Tuesday DIA opened on a gap down to below the 10 day moving average, tested lower & was able to recover to close just below the 10 DMA’s resistance on the week’s highest volume, indicating that the market valued DIA lower, but some optimists remained.

Wednesday this trend continued, as DIA again opened lower, tested almost as low as Tuesday, before closing -0.08% on the day on the lowest volume of the week.

Thursday opened higher & managed to break above the 10 DMA’s resistance intraday & close above it, but the volume paled in comparison to the three sessions of declining volume that made up the rest of the week.

Friday the week wound down on a session that opened slightly higher, tested up to the new all-time high, before collapsing down to $$452.98/share level & settling just below the 10 day moving average.

The volume story here shows that there was still significant hesitency & downside appetite, particularly when you look at the declining volume vs. advancing volume of the week & profits were certainly being taken after a stronger August than anticipated.

Moving into a new week, the upside case for DIA remains the same as it has been for months now, new all-time highs will only continue in a choppy manner like last week, and or with continued higher levels of advancing volume in order to prove sustainable.

The 10 day moving average will also need to show considerable strength compared to that of last week in order to support any upside moves.

The consolidation case remains similar, expect to see DIA oscillate around the 10 DMA & between it and the 50 DMA as it draws nearer & we await an upside or downside catalyst.

To the downside things have changed a bit, with the 50 day moving average drawing nearer to price by the day, a gap down of <2% suddenly has that support levels being tested, which hasn’t happened since early August.

The $450.29/share level is also going to be of interest, as if it gives out DIA will begin to close windows from August that are still open, which leads to said 50 DMA test & will have some level of steam built up behind it, particularly after the declining volume of the past week.

DIA has support at the $449.98 (Volume Sentiment: Buyers, 9:1), $446.55 (Volume Sentiment: Buyers, 2.73:1), $446.27 (Volume Sentiment: Buyers, 2.73:1) & $446.27/share (50 Day Moving Average, Volume Sentiment: Buyers, 2.73:1) price levels, with resistance at the $455.20 (10 Day Moving Average, Volume Sentiment: NULL, 0:0*) & $458.67/share (All-Time High, Volume Sentiment:NULL, 0:0*) price levels.

The Week Ahead

Monday brings us Consumer Credit data at 3pm.

Planet Labs reports earnings before Monday’s closing bell, before Casey’s General & Mission Produce report after the session’s close.

NFIB Optimism Index data comes out Tuesday at 6 am.

Tuesday morning kicks off with earnings from Core & Main, Hello Group, Korn/Ferry & Sail point, before AeroVironment, Calavo Growers, GameStop, Oracle, Rubrik & Synopsys report following the closing bell.

Wednesday morning features Producer Price Index, Core PPI, PPI Year-over-Year & Core PPI Year-over-Year at 8:30 am & Wholesale Inventories data at 10 am.

Chewy reports before Wednesday’s open, before Oxford Industries reports earnings after the day’s close.

Consumer Price Index, CPI Year-over-Year, Core CPI, Core CPI Year-over-Year & Initial Jobless Claims data all comes out Thursday at 8:30 am, followed by Monthly U.S. Budget data at 2pm.

Thursday morning brings earnings from Kroger & Lovesac, before Adobe reports after the closing bell.

Friday morning features Consumer Sentiment (prelim) data at 10 am & there are no noteworthy earnings 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 ***

SPY, the SPDR S&P 500 ETF dipped -0.04% last week, while the VIX closed at 15.36, indicating an implied one day range of movement of +/-0.97% & an implied one month range of movement of +/-4.44%.

Their RSI is trending down towards the neutral 50 level & sits at 59.22, while their MACD is bearish, but flat in the wake of Friday’s declines.

Volumes were -6.78% lower than the prior year’s average (57,446,000 vs. 61,621,031.8), which raises eyebrows given that more advancing sessions occurred last week than declines & Friday’s declining session had the highest volume.

Monday set the tone for calling into question the strength of SPY’s short-term trendline, as the session formed a bearish harami pattern with the prior Friday’s candle & closed right atop the 10 day moving average’s support.

Tuesday opened just lower than Monday’s close, but formed a bullish engulfing pattern with Monday’s candle, with neither session having particularly strong volume, indicating that there was certainly a pause on the horizon.

Wednesday opened slightly lower, but was able to advance +0.23% on even lower volume, indicating that there was more waning confidence among market participants.

Thursday opened on a gap higher, retraced into Wednesday’s range before charging higher, but left mixed signals.

Thursday’s session had the second highest volume of the week, which would normally be viewed as a sign of emerging confidence after the previous three days, but the candle resulted in a spinning top, indicating indecision.

Friday is when the fear broke out, with SPY opening lower than Thursday & testing down to near the 10 day moving average’s support, and closing for a -0.6% decline on the day.

Friday featured the highest volume of the week, indicating that there was limited appetite for risk heading into the weekend & that profits were being taken & that folks were preparing to hop out of the pool.

Moving into the new, short holiday week the upside case remains the same as in the notes of prior couple of months; without an increase in advancing volume that remains consistent then any new all-time highs are at risk to fall apart.

The consolidation case also remains the same, as SPY would just oscillate around the 10 day moving average awaiting for an upside or downside catalyst to push it in a direction.

In the event of a downside catalyst/move, we’ll see the 10 DMA break down first, which then directs attention to the 50 day moving average given that the next support level is in a Seller zone historically & is <1% lower.

Should the 50 DMA’s support hold up there could be a brief consolidation featuring oscillations between the 10 & 50 day moving averages, which would be the best case scenario.

In the event of further declines the $619.48/share is the last line of defense before the support of a consolidation zone with touchpoints at $609.59 & $607.15.

SPY has support at the $643.03 (10 Day Moving Average, Volume Sentiment: NULL, 0:0*), $639.85 (Volume Sentiment: Sellers, 1.5:1), $629.70 (50 Day Moving Average, Volume Sentiment: BUyers, 5.4:1) & $619.29/share (Volume Sentiment: Buyers, 1.8:1) price levels, with resistance at the $649.48/share (All-Time High, Volume Sentiment: NULL, 0:0*) price levels.

QQQ, the Invesco QQQ Trust ETF declined -0.27% last week, faring the worst of the major four index ETFs.

Their RSI is trending down towards the neutral 50 mark & is currently at 52.22, while their MACD is bearish & looks set to diverge further bearish from the signal line in the coming week.

Volumes were +3.96% higher than the prior year’s average levels (41,578,000 vs. 39,995,000), mostly due to Thursday & Friday’s price action, which isn’t particularly telling about QQQ’s sentiment.

Monday the week began similarly to SPY’s, as a low volume session resulted in a bearish harami cross, that notably was unable to break above the 10 day moving average.

The gravestone doji also was a harbinger of near-term pain, as market participants decided that the fair valuation of QQQ was in the $570.32-.40 range based on the day’s open & close.

Tuesday opened lower, but was able to rally higher to close just below the resistance of the 10 day moving average, again on low volume.

Wednesday signaled that there was a bit more further confusion in the market, as QQQ opened just below Tuesday’s close, but was able to eventually break out above the resistance of the 10 DMA, but again, volumes were unimpressive.

Thursday opened on a gap higher, retraced down to the support of the 10 DMA, but eventually pushed higher to close +0.63% higher day-over-day on slightly higher volume.

The gap was short lived however, as it was filled immediately on Friday’s -1.16% declining session that featured the highest volume of the week, as like SPY, QQQ was showing cracks.

The week ahead’s landscape looks much like SPY’s & sounds exactly the same as the past couple of months’s message: the move higher needs sustainable advancing volume to accompany these new all-time highs.

It’s also worth noting the emerging bearish head & shoulders pattern, where Thursday’s session is the right shoulder.

Should this be true, then there are possibilities, the first being that we see a consoldation range emerge between & tightly around the 10 & 50 day moving averages, which are also getting quite close to one another & look to have a bearish crossover in the coming days.

In the event that there is a downside catalyst the $551.68/share level is important, as it is in a Seller dominated price zone, and is the gate keeper to the mid-June unfilled window.

In the event that QQQ attempts to fill that window & succeeds there are pockets of support along the way, but the 200 day moving average will be something to begin looking at & assessing the strength of in terms of a support level.

QQQ has support at the $561.65 (50 Day Moving Average, Volume Sentiment: Buyers, 1.74:1), $558.84 (Volume Sentiment: Buyers, 6.25:1), $551.68 (Volume Sentiment: Sellers, 1.28:1) & $539.40/share (Volume Sentiment: Buyers, 5.5:1) price levels, with resistance at the $571.14 (10 Day Moving Average, Volume Sentiment: NULL, 0:0*), $574.63 (Volume Sentiment: NULL, 0:0*) & $583.32/share (All-Time High, Volume Sentiment: NULL, 0:0*) price levels.

IWM, the iShares Russell 2000 ETF advanced +0.14%, as the small cap index was the favorite among investors.

Their RSI is just below the overbought 70 Mark & sits at 64.4 currently, while their MACD is bullish, but appears to be bearishly curling over towards the signal line & is possibly at its local apex.

Volumes were -12.99% lower than the prior year’s average (26,646,000 vs. 30,623,175), which signals uncertain to complacent attitudes among market participants, as the highest volume sessions on the week were both declines.

Monday began the same as SPY & QQQ, as a bearish harami pattern emerged on a declining session that had the second highest volume of the week.

Tuesday opened higher & managed to continue higher on weak volume, leading to Wednesday’s lower open but rally to break out above the $235/share level.

Thursday is where things began to unwind, despite a gap up open as IWM began to decline, briefly dipping below the $235/share level but settling +0.12% day-over-day, while below the day’s open.

Friday the wheels officially came off & the highest volume session of the week resulted in a decline of -0.44% & set the stage for a difficult week ahead.

While IWM is not as close to its all-time highs as SPY & QQQ, it will move higher in tandem with these & DIA, so there will need to be in influx in advancing volume for the small cap index to continue higher.

The consolidation case at the moment features IWM oscillating around its 10 day moving average as we await a catalyst to the upside ro downside, which would also mean that the 10 & 50 DMAs would begin nearing each other (oscillations may begin to flutter between each as well).

The downside case for IWM is tricky, as it tends to oscillate around more than just outright climb higher like SPY & QQQ, so it has more frequent local support levels.

However, given that if faith in the larger cap names waivers that lack of optimism can easily spread over into the small cap index as well, which could prove problematic for IWM.

While Buyers have been resilient at most price levels below IWM’s Friday closing price historically, the $225/share level is the first place to be watching in terms of downside activity.

The $225.97-226.32/share level is the bottom of the window created in mid-August that remains unfilled.

In the event that we see that take place, eyes should begin focusing on the 200 day moving average, as the long-term trend will come into play, which makes for an interest set up as it resides in a Seller dominated zone, which also includes the two touchpoint $212.90 support levels.

IWM has support at the $231.43 (10 Day Moving Average, Volume Sentiment: Buyers, 1.56:1), $229.55 (Volume Sentiment: Buyers, 1.56:1), $226.71 (Volume Sentiment: Buyers, 1.06:1) & $226.04/share (Volume Sentiment: Buyers, 1.06:1) price levels, with resistance at the $240.47 (Volume Sentiment: Buyers, 0.4:0*) & $243.04/share (Volume Sentiment: Buyers, 0.4:0*) price levels.

DIA, the SPDR Dow Jones Industrial Average ETF fell -0.12% for the week, as even the blue chip names were not invincible.

Their RSI is trending downwards at 63.8, while their MACD is still bullish, but their histogram is beginning to show signs of weakening & will be something to keep an eye on in the coming week.

Volumes were +4.33% higher than the prior year’s average (3,444,000 vs. 3,301,111.11), which is unnotable, particularly given that they remained in a consolidation range.

Monday DIA kicked off the week with a bearish harami pattern forming during the week’s strongest volume session, followed by Tuesday opening on a gap lower but managing to recover & advance.

Wednesday opened higher & was able to climb higher, before Thursday gapped up on the open, but declined throughout the session & closed lower than it opened, for a gain of +0.17% on the day.

Friday opened on a gap down, saw buying & selling pressure, but ultimately closed -0.15% on the day as a doji candle, indicating that there was complacency & uncertainty abound.

Heading into the new week, the story remains the same for DIA to the upside, without sustained, elevated advancing volume there is going to be limited further upside.

Oscillations around the 10 day moving average mark the consolidation case.

The downside casefor DIA becomes tricky & depends greatly on the catalyst given the Buy & Hold nature of many of its components.

In the event of some major catastrophy there would likely be a significant flight to safety that impacts the structure of DIA in a major manner.

In the event of a regular pullback though, $446.27-446.55 will be an area to watch, as should they break down then the 50 day movingaverage is likely to fall, which leads to the 200 day moving average becoming the next area of interest, as it resides two support levels lower.

DIA has support at the $452.88 (10 Day Moving Average, Volume Sentiment: NULL, 0:0*), $449.98 (Volume Sentiment: Buyers, 9:1), $446.55 (Volume Sentiment: Buyers, 2.73:1) & $446.27/share (Volume Sentiment: Buyers, 2.73:1) price levels, with resistance at the $457.87/share (All-Time High, Volume Sentiment: NULL, 0:0*) price levels.

The Week Ahead

Monday the market is closed for the Labor Day holiday in the US., so there will be no economic data or earnings reports.

S&P Final U.S. Manufacturing PMI data comes out Tuesday at 9:45 am, followed by ISM Manufacturing & Construction Spending data at 10 am.

Tuesday morning’s earnings calls include Academy Sports + Outdoors, NIO & Signet Jewlers, with Zscaler reporting after the closing bell.

Wednesday begins with Fed President Musalem speaking at 9 am, Job Openings & Factory Orders data at 10 am, Fed President Kashkari speaking at 1:30 pm & the Fed Beige Book at 2pm.

Dollar Tree, Campbell Soup, Macy’s, REV Group & Sprinklr report earnings before Wednesday’s opening bell, before Salesforce, American Eagle, Asana, C3.ai, Credo Technology Group, Descartes, GitLab, Hewlett Packard Enterprise & Pager Duty report after the session’s close.

ADP Employment, Initial Jobless Claims, U.S. Productivity (revision) & U.S. Trade Deficit data come out Thursday at 8:30 am, followed by S&P Final U.S. Services PMI data at 9:45 am, ISM Services Data at 10 am, Fed President Williams speaking at 12:05 pm & Fed President Goolsbee speaking at 7pm.

Thursday morning begins with 1-800-FLOWERS, Brady, Caleres, Ciena, Endava, G-III Apparenl, Science Applications, Shoe Carnival & Toro before the session opens, with Broadcom, Argan, Braze, Copart, DocuSign, Guidewire Software, Lululemon Athletica, Phreesia, Samsara, ServiceTitan, Smith & Wesson Brands, UiPath & Zumiez reporting after the closing bell.

Friday the week winds down with U.S. Employment Report, U.S. Unemployment Rate, U.S. Hourly Wages & Hourly Wages Year-over-Year data at 8:30 am.

ABM Industries reports earnings before Friday’s session’s opening bell.

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 ***