SPY, the SPDR S&P 500 ETF advanced 1.52% last week, while the VIX closed at 14.93 indicating an implied one day move of +/-0.94% & an implied one month move of +/-4.32%.
Their RSI is overbought at 76.18, while their MACD is bearish, but approaching the signal line & may dolphin above it briefly in the coming week.
Volumes were +6.57% higher than the prior year’s average (64,422,000 vs. 60,452,000), which signals that there was a bit of cautious climbing higher in response to earnings call results, given that all five sessions of the week were advancing.
However, they also came flashing warning signs as SPY continued to set new all-time highs throughout the week.
Monday the week opened on what could at first seem like an optimistic note, but closed on a rather grim outlook.
SPY opened on a gap up, climbed to temporarily break out above the $530/share level, but ultimately intraday profit taking resulted in the day losing as a gravestone doji candle, indicating caution & bearishness seeping into the market.
Tuesday was more of the same, but showed that there was some optimism surrounding earnings results, as the session opened in-line with Monday’s, tested lower, before coming back to close as a dragonfly doji.
The support of the 10 day moving average managed to hold up, signaling that the near-term trend is in-tact & the dragonfly doji signaled that there was a cautious sentiment of SPY trading higher, as Wednesday had a heavy schedule of earnings that included GOOG, RTX & TSLA amongst other large companies.
This led to a gap up open on Wednesday, making space between SPY’s price & the 10 day moving average that went relatively untested, aside from a brief dip under the $630/share price level, but shares closed +0.85% up on the day on the week’s second highest volume session.
Thursday produced the highest volume session that came with a catch.
On another gap up open, SPY managed to test higher, but profit taking began & forced the second gravestone doji candle of the week, signaling that there remained near-term uncertainty among market participants.
The week wound down on an advancing session of +0.42%, but the upp shadow on the day’s candle point to more continued caution coming into the new week.
As has been the case for weeks now, the upside case continues to remain that SPY’s all-time high needs to continue climbing higher with strong, sustainable advancing volume.
However, the higher we climb, the less likely this trend is to continue, particularly given the overheated RSI reading that we’re seeing now.
Consolidation looks like oscillations around the 10 DMA, which was -1.29% below Friday’s price at the close, while we wait for the next upside or downside catalyst.
In the event that the catalyst is to the downside & the 10 day moving average does not hold up, there are a few things to take into consideration.
The first being that the gappy ascent of the past month has some windows that have been left open, which are likely to be retested & closed.
Another area of concern is that SPY’s second highest support levels is -4.32% below Friday’s closing price.
While there are three support levels clustered in that zone (including the 50 day moving average which is still advancing), the high 2.6:1 Buyer:Seller ratio historically will likely face some dilution in the event of a retest.
This raises the importance of watching the FOMC decision on Wednesday afternoon, tariff announcements before the Friday deadline & continuing to watch earnings results to see how guidance is changing among SPY component stocks.
SPY has support at the $629.02 (10 Day Moving Average, Volume Sentiment: NULL, 0:0*), $609.59 (Volume Sentiment: Buyers, 2.6:1), $607.15 (Volume Sentiment: Buyers, 2.6:1) & $606.40/share (50 Day Moving Average, Volume Sentiment: Buyers, 2.6:1) price level, with resistance at the $637.58 (Volume Sentiment: NULL, 0:0*) price level.
QQQ, the Invesco QQQ Trust ETF added +0.91% last week, faring the worst of the major four index ETFs.
Their RSI is overbought at 71.94, while their MACD is similar to SPY’s, bearish, but may pop above the signal line briefly this week.
Volumes were-0.8% lower than the prior year’s average (39,200,000 vs. 39,517,960), which is reason for caution given that the highest volume session of the week came on a decline.
Monday opened higher, but showed that much like SPY there were reservations about straying too far from the near-term trendline.
Tuesday confirmed this when QQQ opened higher, but ultimately declined into the session, going as low as to test the 10 day moving average’s support, but it held robust.
Tuesday’s candle also resulted in a bearish engulfing pattern with Monday’s, giving another signal that all sentiment was not entirely well for the tech heavy NASDAQ.
Wednesday inspired some sense of at least near-term optimism, when QQQ opened, retested the 10 DMA’s support again, but was able to close for an advance & form a (weak) bullish harami pattern with Tuesday’s candle.
This lead Thursday’s slight gap up open to be of no surprise, but the fact that it closed as a spinning top candle that closed lower than it opened indicates a mix of caution & confusion among market participants & ultimately does not inspire confidence heading into the new week.
Friday also confirmed this, as despite gaining +0.24% on the day, the session had the week’s lowest volume & the upper shadow on the day’s candle signal that there are cracks forming in confidence around QQQ.
Like SPY, QQQ’s bullish case involves more new all-time highs, which will require a great deal of advancing volume to wind up being successful.
Its consolidation case also is the same as SPY’s & those of weeks past; oscillations around the 10 day moving average’s support until we see some type of upside or downside catalyst.
Similarly, QQQ’s declining case is also much like that of SPY, their first support level is their 10 day moving average, which was -0.88% below Friday’s closing price & the next highest level of support is -4.76% below Friday’s close.
While there is historic Buyer sentiment at the price zone of $535-539.99, there is a window below the three support levels that it houses that needs to be closed, which will likely force a historic dilution of the Buyer strength.
In the near-term though it will be important to watch to see if price retests the three support levels mentioned & to see how sturdily they hold up.
QQQ has support at the $561.39 (10 Day Moving Average, Volume Sentiment: NULL, 0:0*), $539.40 (Volume Sentiment: Buyers, 3.67:1), $538.19 (50 Day Moving Average, Volume Sentiment: Buyers, 3.67:1) & $536.88/share (Volume Sentiment: Buyers, 3.67:1) price level, with resistance at the $567.70 (Volume Sentiment: NULL, 0:0*) price level.
IWM, the iShares Russell 2000 ETF gained +0.92% last week, just edging out QQQ for second worst performing major index ETF of the week.
Their RSI is at 59.1, while their MACD is bearish & trending lower.
Volumes were -1.48% lower than the previous year’s average (30,110,000 vs. 30,562,000), which is signaling that there is a bit of uncertainty & hesitancy coming into this week for the small cap index.
Monday opened the week up on a bearish note, as despite some intra-day advances for IWM as shown by the session’s upper shadow, market participants sold as the day progressed & lead to a close that broke down below the 10 day moving average’s support.
Tuesday opened slightly higher, tested lower, but was able to rally higher, temporarily breaking above Monday’s opening price before settling into the close for a gain of +0.83% & forming a bullish harami pattern with Monday’s candle, signaling that there would be some near-term optimism.
Wednesday saw IWM open on a gap up, briefly see some profit taking, before climbing higher to advance +1.53%, but the day’s lower shadow showed that there was already appetite to take profits & close the window created by the gap.
Thursday saw profits taken down from the table & Friday showed that there was cautious uncertainty abound for the small cap index, as the day resulted in a bearish harami cross that’s low broke down through the 10 day moving average’s support.
The upside case for IWM is the same as last week, as despite the $226.04/share resistance levels breaking down, it came as a result of a gap up & the Seller dominated $224-227.99/share zone remained bearish & denied price to advance much higher.
Now the $226.71/share is the upside target to watch in terms of whether or not IWM can rally higher.
The consolidation case centers around the breakdown of the 10 day moving average, resulting in price oscillating between $224/share & the 200 day moving average while we await a catalyst higher or one that forces the breakdown of the long-term trendline.
The declining case also centers around the breakdown of the 200 day moving average’s support, at which time attention should be brought to the $212.50/share level, which is currently the gatekeeper for the unclosed window that was a result of a gap up in late June.
IWM has support at the $222.86 (10 Day Moving Average, Volume Sentiment: Buyers, 2.41:1), $222.40 (Volume Sentiment: Buyers, 2.41:1), $219.93 (Volume Sentiment: Buyers, 1.19:1) & $219.57/share (Volume Sentiment: Buyers, 1.19:1) price level, with resistance at the $224.60 (Volume Sentiment: Sellers, 1.23:1), $225.37 (Volume Sentiment: Sellers, 1.23:1), $226.04 (2 Touch-Points*, Volume Sentiment: Sellers, 1.23:1) & $226.71/share (Volume Sentiment: Sellers, 1.23:1) price levels.
DIA, the SPDR Dow Jones Industrial Average ETF gained +1.3%, having the second best week of the major four index ETFs, trailing only SPY.
Their RSI is trending higher at 63.45, while their MACD is still bearish & looking like it is ready to head lower coming into the new week.
Volumes were +24.15% higher than the prior year’s average (3,984,000 vs. 3,209,080), which reflects Wednesday’s high volume advancing session & Thursday’s almost as high volume profit taking session primarily.
Monday opened up with appetite for higher prices, but the open & close were straddling the 10 day moving average’s support, show uneasiness among market participants.
Tuesday opened lower & below the 10 DMA, but was able to rally back to close above it for an intra-day gain of +0.34%.
Wednesday opened on a gap higher, briefly retraced a dip lower before powering higher to set a new all-time high on the week’s strongest volume.
Thursday opened on a gap lower, advanced higher briefly, before Sellers came out in droves forcing the session to close on the second highest volume of the week on a bearish gravestone doji candle.
Friday opened on a gap up, retraced down briefly to beyond the lows of Thursday’s session, before climbing higher to advance +0.43% for the day.
This lower shadow signaled that there is appetite for the window created by Wednesday’s gap to be filled in the near-term.
The advancing case for DIA is similar to those of SPY & QQQ, as they are all in similar proximity to all-time highs.
While Wednesday featured high advancing volume, the sustainability has not been shown, both due to the other low volume advancing sessions & by Thursday’s high volume declining session.
Their consolidation case is also similar to the aforementioned index ETFs, as it will likely be oscillations around the 10 day moving average awaiting an upside or downside catalyst.
In the event of a decline, the next three support levels reside in an extreme Buyer oriented zone, which will likely see some dilution in the near-term as there has historically been limited downside action in it.
If the 10 day moving average breaks down, the next ~1% of price has no support levels & is historically dominated by Sellers, which would be cause for further declines, making the $439.66/share support level important.
This is because in the event it breaks down, the next support levels is -1.74% below & sits atop another Seller zone just $0.03 below it, which would likely see more declines that would force the closing of windows left open from late June 2025.
DIA has support at the $446.82 (Volume Sentiment: Buyers, 14:1), $446.54 (Volume Sentiment: Buyers, 14:1), $444.96 (10 Day Moving Average, Volume Sentiment: Buyers, 14:1) & $439.66/share (Volume Sentiment: Buyers, 1.71:1) price level, with resistance at the $450.25 (All-Time High, Volume Sentiment: NULL, 0:0*) price level.
The Week Ahead
Monday opens the week up on a quiet note on the economic news front.
Bank of Hawaii, Enterprise Products & Revvity all report earnings before Monday morning’s session, with Ameris Bancorp, Amkor, Bank of N.T. Butterfield & Son, Beyond, Brixmor Property, Brown & Brown, Cadence Design, Cincinnati Financial, CNO Financial, COPT Defense Properties, Crane, Curbline Properties, Exelixis, Harmonic, Hartford Financial, Kforce, Kilroy Realty, NOV Inc., Nucor, Olin, Piedmont Office Realty Trust, PotlatchDeltic, Principal Financial Group, Rambus, Sanmina, Simpson Manufacturing, UFP Industries, Ultra Clean Holdings, Universal Health, Veralto, Waste Management, Welltower, Western Union, Whirlpool & Woodward after the closing bell.
Advanced U.S. Trade Balance in Goods, Advanced Retail Inventories & Advance Wholesale Inventories all are released Tuesday morning at 8:30 am, before S&P Case-Shiller Home Price Index (20 Cities) data at 9 am and Consumer Confidence & Job Openings data at 10 am.
Tuesday morning’s earnings kick off with Procter & Gamble, Alkermes Plc, American Tower, Anywhere Real Estate, Ares Capital, Armstrong World Industries, Asbury Automotive, AstraZeneca, Bandwidth, Brightstar Lottery, Carrier Global, CBRE Group, CECO Environ., Celestica, Commvault Systems, Constellium, Corning, DTE Energy, Eagle Materials, Ecolab, Expro Group, Franklin Electric, GATX, GeneDx, Graphic Packaging, Herc Holdings, Hubbell, Incyte, JetBlue Airways, Johnson Controls, Lithia Motors, Merck, Neogen, NeoGenomics, Norfolk Southern, PayPal, Philips, PJT Partners, Polaris Industries, Repligen, Royal Caribbean, SoFi Technologies, Spotify, Stanley Black & Decker, Sysco, Trimas, UBS AG, UnitedHealth & UPS, before Acadia Realty Trust, Arch Capital, Artisan Partners Asset Mgmt, Ashland, AtriCure, Avis Budget, AXIS Capital, Booking Holdings, BXP, Inc., Caesars Entertainment, Camping World, Cheesecake Factory, Chemed, Electronic Arts, Essex Property, ExlService, Expand Energy, First Commonwealth, First Interstate Bancsystem, Four Corners Property Trust, Freshworks, Frontier Communications Parent, FTAI Aviation Ltd., Gildan Activewear, Highwoods Prop, Houlihan Lokey, Landstar System, Lending Club, Logitech Int’l SA, MARA Holdings Inc., Mondelez Int’l, Nabors Industries, Nextracker, NMI Hldgs, Northwest Bancshares, O-I Glass, Pebblebrook Hotel Trust, Penumbra, PPG Industries, Qorvo, Red Rock Resorts, Regency Centers, Republic Services, Seagate Tech, Sensata Tech, STAG Industrial, Starbucks, Teladoc, Teradyne, Ternium S.A., Titan America, UMB Financial Corporation, Unum Group, Varonis Systems, Visa, W.P. Carey, Werner Enterprises, WesBanco Inc. & Zurn Elkay Water Solutions report following the session’s closing bell.
Wednesday kicks off with ADP Employment data at 8:15 am, followed by GDP data at 8:30 am, Pending Home Sales data at 10 am, the FOMC Interest-Rate Decision at 2 pm & Fed Chair Powell’s Press Conference at 2:30 pm.
AerCap, Agnico-Eagle Mines, Altria, American Electric, ArcBest, Ardmore Shipping, Automatic Data, Axalta Coating Systems, Bausch + Lomb, Blackbaud, Bunge, CGI Group, Check Point Software, Chefs’ Warehouse, Clarivate, Clean Harbors, Criteo, Entegris, Entergy, Etsy, Evercore, Federal Signal, Fiverr, Fortive, Fresh Del Monte, Garmin, Gates Industrial, GE HealthCare, Generac, GlaxoSmithKline, Harley-Davidson, Hayward Holdings, Hershey Foods, Hess Midstream Partners, Humana, IDEX Corp, Illinois Tool, InMode, Ionis Pharma, Kraft Heinz, Leonardo DRS, Littelfuse, LXP Industrial Trust, Materion, Monro Muffler, Navient, New Oriental Education & Technology, Newmark Group, OGE Energy, Old Dominion, OneSpaWorld, Option Care Health, Penske Auto, ProPetro, Radware, Reynolds Consumer Products, Scorpio Tankers, Scotts Miracle-Gro, Silgan Holdings, SiteOne Landscape Supply, Sleep Number, Smurfit Westrock plc, Stepan Company, Steven Madden, Stifel Financial, Strategic Education, Teva Pharma, The Vita Coco Company, Thryv, Timken, Tradeweb Markets, Trane, United Therapeutics, V.F. Corp, Verisk Analytics, Vertiv, Virtu Financial, Watsco, WEC Energy Group & Wingstop all report earnings before Wednesday’s opening bell, followed by Albany Intl, Albemarle, Align Tech, Alignment Healthcare, Alkami Technology, American Water Works, Antero Midstream, Antero Resources, Applied Digital Corporation, Arm Holdings plc, AvalonBay, Axos Financial, Benchmark Electronics, Black Hills Corp, C.H. Robinson, Cactus, Canadian Pacific Kansas City, Carlisle Cos, Carvana, CBIZ, Cognex, Cognizant Tech, Comstock, Confluent, CONMED, Custom Truck One Source, CVR Energy, Dexcom, eBay, Element Solutions, Employers Holdings, EPR Properties, Equinix, Ethan Allen, Everest Group, EVERTEC, Extra Space Storage, F5 Networks, Fair Isaac, FirstEnergy, Flowserve, FMC Corp, Ford Motor, FormFactor, Glaukos, Green Brick Partners, Guardant Health, Hanover Insurance, Hologic, Host Hotels, Impinj, Independence Realty Trust, Invitation Homes, Lam Research, Magnolia Oil & Gas, Merit Medical, Meta Platforms, MGIC Investment, MGM Resorts, Microsoft, Mid-America Aptmt, Mister Car Wash, Modine Manufacturing, Murphy USA, MYR Group, National Fuel Gas, NETGEAR, Neurocrine Biosciences, NorthWestern, Pilgrim’s Pride, Pitney Bowes, Prudential, PTC, Public Storage, Q2 Holdings, Qualcomm, Radian Group, Robinhood Markets, Rush Enterprises, Rush Street Interactive, Service Corp, Silicon Motion, Sixth Street Specialty Lending, Sprouts Farmers Market, SPS Commerce, Sturm Ruger, Sun Communities, Tenable, Tenaris, Tetra Tech, TransMedics Group, Tronox, TTM Tech, Tyler Tech, Udemy, UDR, Ventas, VICI Properties, VSE Corp, Waystar Holding Corp. & Western Digital after the session closes.
Initial Jobless Claims, Employment Cost Index, Personal Income, Personal Spending, PCE Index, PCE (Year-over-Year), Core PCE Index & Core PCE Index (Year-over-Year) are all released Thursday at 8:30 am, before the Chiacgo Business Barometer (PMI) data is released at 9:45 am.
Thursday’s morning earnings calls include AbbVie, AGCO Corp, Air Products, Alamos, Allegro Microsystems, Alnylam Pharma, Ametek, Amicus Therapeutics, Anheuser-Busch InBev, APi Group, Aptiv, ArcelorMittal, Arrow Electronics, ATI Inc., Autohome, Balchem, Baxter, Belden, BigCommerce, Biogen, BorgWarner, Bristol-Myers, Brookfield Infrastructure, Builders FirstSource, California Water, Cameco, Canada Goose, Carpenter Tech, Chart Industries, CMS Energy, Colliers, Comcast, Cullen/Frost, CVS Health, Donnelley Financial, DT Midstream, EMCOR Group, Euronet, Exelon, Genesis Energy, L.P., GFL Environmental, HF Sinclair, Hilton Grand Vacations, Howmet Aerospace, Huntington Ingalls, IdaCorp, Insight Enterprises, Int’l Paper, Integra, Intercontinental Exchange, InterDigital, Itron, ITT, Janus Henderson Group, KBR, Kellanova, Kimco Realty, Kinross Gold, Kirby, KKR, Laureate Education, Lightspeed, Lincoln Electric, Lincoln National, Masco, Mastercard, Methanex, MGP Ingredients, Norwegian Cruise Line, Oil States, Omnicell, Patrick Industries, PBF Energy, Peabody Energy, PG&E, PPL Corp, Protolabs, Quanta Services, Roblox, S&P Global, Sanofi, Schneider National, Shake Shack, Sirius XM, Southern, Stagwell, TC Energy, Teleflex, Terex, The Cigna Group, TreeHouse Foods, Trinity Industries, Upbound Group, Utz Brands, Valaris, Vericel, Vontier, Vulcan Materials, Wesco, Willis Towers Watson, Xcel Energy, XPO, Inc. & Xylem, with Amazon.com, Apple, Agree Realty, Alphatec, Ameren, American Homes 4 Rent, AppFolio, AptarGroup, Arthur J. Gallagher, Beazer Homes, Bio-Rad Labs, BJ Restaurants, Bloom Energy, Bright Horizons, Camden Property, Casella Waste, CCC Intelligent Solutions, Clorox, Cloudflare, Cohu, Coinbase Global, Columbia Sportswear, Cousins Prop, CubeSmart, Dolby Labs, DXC Technology, Eastman Chemical, Edison, El Pollo Loco, Enovix, Envista, Essential Utilities, Eversource Energy, eXp World Holdings, Exponent, Federated Hermes, First Solar, Five9, Floor & Decor, Fortune Brands Innovations, Grid Dynamics, Healthcare Realty, Hercules Capital, Hub Group, Huntsman, Huron Consulting, ICF International, Illumina, Ingersoll-Rand, Innodata, iRhythm, KLA Corporation, Leggett & Platt, LendingTree, LPL Financial, Lumen Technologies, MasTec, Matson, Mettler-Toledo, MicroStrategy d/b/a Strategy, Monolithic Power, Northern Oil & Gas, Omega Health, Park Hotels & Resorts, Perdoceo Education, Procore Technologies, PROS Holdings, Quaker Chemical, Reinsurance Group of America, ResMed, Rocket Companies, Roku, Ryan Specialty Group, Savers Value Village, Select Medical, Skyward Specialty Insurance, SM Energy, SPX Technologies, Stryker, Universal Display, WillScot Mobile Mini, Workiva & World Kinect Corporation host their earnings calls after the session’s close.
Friday begins with U.S. Employment report, U.S. Unemployment Rate, U.S. Hourly Wages & Hourly Wages Year-over-Year data at 8:30 am, followed by S&P Final U.S. Manufacturing PMI data at 9:45 am and ISM Manufacturing, Construction Spending & Consumer Sentiment (Final) data at 10 am.
Ares Management, Avantor, Avient, BrightSpring Health Services, Cboe Global Markets, Chevron, Church & Dwight, Colgate-Palmolive, Dominion Energy, Exxon Mobil, Fluor, Fortis, Franklin Resources, Fulgent Genetics, Grainger, Imperial Oil, Ingredion, Insperity, Interface, Kimberly-Clark, Linde plc, LyondellBasell, Magna, Moderna, Newell Brands, nVent Electric, Oshkosh, Perella Weinberg Partners, Piper Sandler, RBC Bearings, Regeneron Pharma, T. Rowe Price, Telus, WisdomTree & Xenia Hotels all report earnings before the session’s closing bell.
See you back here next week!
*** I DO NOT OWN SHARES NOR OPTIONS CONTRACT POSITIONS IN SPY, QQQ, IWM, OR DIA AT THE TIME OF PUBLISHING THIS ARTICLE ***