Swing Trading Markets Analysis: Markets Edge Higher – Week#10 (ending May 10th)

Swing Trading Market Summary

Last week most key markets started to show signs of life. Here is the swing trading markets analysis for this week ending May 10th 2024. Most of the markets show continued signs of life heading into next week, however Bitcoin and Oil will probably continue their decline next week.

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.

This week the S&P 500 climbed by 1.38% (compared with +0.22% last) to close the trading week under declining average trading volume. SPY has moved higher above the 20-day (ema) and 50-day moving averages. The S&P 500 continues to make higher lows, lifting higher than the recently established trend line which sets the stage for moving higher next week.

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.

By the end of the week the Nasdaq 100 ended up by 1.10% (compared with +0.51% last week). The Nasdaq 100 moved above both the 20-day (ema) and 50-day moving averages. The Nasdaq 100 is making higher lows and is well above the recently established trend line, hopefully setting up for more positive moves next week.

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.

This week the Nasdaq Financials fell by 0.27% (compared with 0.65% last week) to end the week, essentially remaining flat. This week the financials still ended the week above the 20-day (ema) and 50-day moving averages.

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 climbed 0.38% this week (compared with 1.34% last week) under declining average trading volume and has moved above the 50-day moving average. The Russell 2000 trend up has accelerated compared to the two previous weeks, hopefully setting up for continued upward movement next week.

Unlike the Nasdaq bullish run, the Russell 2000 has traded within a range since April 2022. Key previous resistance points to keep an eye on are around around the 211 and 227 and 242 marks. A lot of the money in the market has been driving the large caps higher over the years leaving the Russell 2000 to underperform. In the bigger picture the Russell 2000 remains within the trading range established back in April 2022, however the Russell 2000 is trading at the high end of the range.

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 rose 0.95% under average trading volume, compared with a decline of 0.06% last week under average trading volume. The Canadian stock market currently sits well above the 20-day (ema) and 50-day moving averages to close the week. The Canadian market is starting to form higher lows, following a pullback from a 5 month upward trend.

Looking at a slightly longer time horizon, we can see that the TSX has been trading sideways since April 2022 and as of this week moved above the previous resistance set in April 2022. Having passed a key resistance level this week, it will be interesting to see if the Canadian stock market moves higher while establishing a new resistance level.

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.

Gold rose 1.65% this week compared with a decline of 1.42% last week. Gold has been in an overall up trend since Nov 2018. More recently gold’s run has seen a slight pull back from its strong run. Gold moved above its 20-day (ema) moving average, and remains well above the 50-day and 200-day moving averages. In recent weeks Gold has been choppy, not yet forming a nice up trend with higher lows.

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.

This week oil fell by 0.32% this week compared with -6.16% last week, now sitting below its 20-day (ema) and 50-day moving averages. USO is approaching its 200-day moving average where it may find support. The possible support level close to the 200-day moving average is more inline with USO’s trend established December 2023 to February 2024.

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.

This week BTC declined by 4.61% compared with -0.52% last week. BTC is continuing its reversal pattern remaining below the 20-day and 50-day moving averages at the end of last week. BTC is making lower lows, which suggests that more downward movement is to be expected. BTC may fall close to the support line established from the October 2023 uptrend before moving back higher.

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%.

This week TLT moved higher by 0.28% compared with 1.33% last week, stabilizing after the Federal Reserve announced it would keep interest rates at a 23-year high after its May gathering, but also announced plans to shrink its massive $7.4 trillion balance sheet at a slower pace.

Swing Trading Market Outlook