Markets Analysis – Week#1 (ending March 8th) Markets Moving Higher

SPY – S&P 500

The S&P 500 stock market index tracks the stock performance of 500 of the largest companies listed on stock exchanges in the United States. It includes approximately 80% of the total market capitalization of public companies in the United States.

The S&P continues to move steadily higher, on a bull run currently up 24% from the low set back in November 2023. We should note that the S&P finished the week slightly down from the high set the day before on Thursday.

QQQ – Nasdaq 100

The Nasdaq 100 is a stock market index made up of 101 equity securities issued by 100 of the largest non-financial companies listed on the Nasdaq stock exchange. It is a modified capitalization-weighted index, meaning the stocks’ weights in the index are based on their market capitalizations with certain rules capping the influence of the largest components. So price fluctuations in companies like Alphabet, Apple, Tesla, Nvidia directly affect the Nasdaq 100 day to day.

The Nasdaq 100 continues to move steadily higher, on a bull run currently up 27% from low set back in November 2023. We should note that the Nasdaq 100 finished the week slightly down from the high set the day before on Thursday.

IXF – Nasdaq 100 Financial

The Nasdaq Financial-100 is a stock market index operated by Nasdaq consisting of companies that are listed on the Nasdaq stock exchange, that are in the financial services industry, including banking, insurance, mortgages and securities trading.

Following a 24% increase from October 2023 to January 2023, the financials are in an up trend following a settling period from Jan to mid-March.

IWM – iShares Russell 2000 ETF

The Russell 2000 Index is a small-cap U.S. stock market index that makes up the smallest 2,000 stocks in the Russell 3000 Index. The index is a widely quoted measure of the overall performance of small-cap to mid-cap company shares. It is commonly considered an indicator of the U.S. economy due to its focus on small-cap companies in the U.S. market.

The Russell 2000 appears to be showing a consolidation pattern, confirmed by rising bottoms and a pullback in volume. Monitoring for near term breakout.

Unlike the Nasdaq bull run, the Russell 2000 has traded within a range since April 2022, so if it rises above the ~212 mark it may break out towards the next resistance level at 240. It would appear that a lot of the money in the market have been driving the large caps higher over the years.

XIU – iShares S&P/TSX 60 Index ETF

XIU is a liquid ETF that tracks the TSX 60 Index, which consists of the top 60 companies in Canada and has a large-cap focus.

The Canadian market is in an up trend although not strongly defined, as volume is decreasing suggesting that the upward push may be losing steam

Now if we look at a slightly longer time horizon, we can see that the TSX is nearing the previous resistance level established in April 2022, there is not a lot of room to run if the April 2022 resistance level holds.

GLD – SPDR Gold Shares ETF

GLD is a relatively cost efficient and secure way to access the gold market. SPDR Gold Shares is the largest physically backed gold exchange traded fund in the world.

Investors have been moving into gold aggressively based on the near vertical price movement confirmed by nearly 2x volume over the last week. Given the parabolic ascent, better not to chase gold at this time.

USO – United States Oil Fund ETF

USO’s investment objective is for the daily changes, in percentage terms, of its shares’ net asset value (NAV) to reflect the daily changes, in percentage terms, of the spot price of light sweet crude oil delivered to Cushing, Oklahoma, as measured by the daily changes in the Benchmark Oil Futures Contract. Specifically, USO seeks for the average daily percentage change in USO’s net asset value, for any period of 30 successive valuation days, to be within plus/minus 10% of the average daily percentage change in the price of the Benchmark Oil Futures Contract over the same period.

Oil is in a consolidation pattern, resembling an ascending triangle, however the current flat volume may lead to a sideways movement in the near term.

GBTC – Grayscale Bitcoin Trust

Bitcoin is a digital asset that is created and transmitted through the operations of the peer-to-peer Bitcoin Network, a decentralized network of computers that operates on cryptographic protocols. The Bitcoin Network allows people to exchange tokens of value, Bitcoins, which are recorded on a public transaction ledger known as a Blockchain.

The Grayscale Bitcoin Trust is one of the first securities solely and passively invested in Bitcoin (“BTC”) that enables investors to gain exposure to BTC in the form of a security while avoiding the challenges of buying, storing, and safekeeping BTC, directly.

Since breaking resistance in mid October 2023, Bitcoin has been been in a strong overall uptrend which has since gone vertical perhaps chasing the BTC through new ETFs, however declining trading volume suggests a peak is near.

TLT – iShares 20+ Year Treasury Bond ETF

The iShares 20+ Year Treasury Bond ETF seeks to track the investment results of an index composed of U.S. Treasury bonds with remaining maturities greater than twenty years. The TLT portfolio’s effective duration is 16.5 years. So, if interest rates fall by 1.0%, TLT’s price could rise by 16.5%.

TLT is in an overall down trend, which has resumed as of Jan 2024. This likely reflects the current sentiment that interest rate cuts have not occurred and that interest rate cuts may not be imminent.

Market Outlook