Swing Trading Markets Analysis: Markets Move Higher – #wk11 ending May 17th

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 17th 2024. Markets are likely to move higher through next week, however Oil and Bitcoin should be watched closely to see which direction they trend.

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 edged higher by 1.31% (compared with +1.38% last week) to close the trading week under declining average trading volume. SPY remains well above the 21-day (ema) and 50-day moving averages. The S&P 500 continues to edge higher at a faster (steeper) pace than the period from November 2023 to April 2024, and has passed the high (523 level) set back in April 2024.

Next week: upward momentum is likely to continue

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 edged up by 1.76% (compared with +1.10% last week). The Nasdaq 100 remains well above both the 20-day (ema) and 50-day moving averages. The Nasdaq 100 has been rising at a faster pace the last two weeks compared to the November 2023 to April 2024 period. The Nasdaq 100 also passed the high from back in March at the 446 level.

Next week: upward momentum is likely to continue

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 edged higher by 1.16% (compared with -0.27% last week) to end the week, and has started to move away from the 21-day (ema) and 50-day moving averages. Nasdaq Financials have not yet passed the high (5694 level) but is trending at an accelerated pace to that level.

Next week: upward momentum is likely to continue

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 1.00% this week (compared with 0.38% last week) under average trading volume and remains well above the 21-day (ema) and 50-day moving averages. The Russell 2000 trend remains linear in contrast to the trading period from November 2023 to March 2024. Over the last two weeks the Russell 2000 has ascended at a faster (steeper line) pace compared to periods prior.

Next week: upward momentum is likely to continue

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 0.35% (compared with +0.95% last week) under average trading volume. The Canadian stock market now sits well above the 21-day (ema) and 50-day moving averages to close the week. This week the Canadian market remains above the previous high of $33.91.

Next week: upward momentum is likely to continue

Looking at a slightly longer time horizon, we can see that the TSX has been trading sideways since April 2022 and only recently has broken through the high / 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 3.03% this week compared with a rise of 1.65% 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 remains above its 21-day (ema) moving average, and remains well above the 50-day and 200-day moving averages. In recent weeks Gold’s decline has reversed forming a cup without handle pattern, rising above a key resistance level at the $221 point.

Next week: upward momentum is likely to continue

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 rose by 1.62% compared to last week where it declined by 0.32%, now sitting just above its 21-day (ema) and below its 50-day moving averages. USO is moving away from its 200-day moving average. Overall Oil is still in a downward trend.

Next week: watch for trend confirmation

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 rose by 6.83% compared with a decline of 4.61% last week. BTC is continuing its reversal pattern closing above its 21-day (ema) and 50-day moving averages. BTC has crossed a key resistance level this week, marking a potential move higher in the weeks ahead.

Next week: watch for continued rise above the resistance level

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 0.93% compared with 0.28% 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. As the we move close to the mid-point of 2024, the likelihood of at least one interest rate cut is high and expected.

Next week: watch for trend confirmation

Swing Trading Market Outlook