Swing Trading Markets Analysis: CrowdStrike Decline of 17.95% #wk20

Swing Trading Market Summary Shows Strength in Nasdaq Financials, Russell 2000 and Canadian S&P/TSX as CrowdStrike Decline of 17.95%

Here is the swing trading markets analysis for this week #20 (5 months in to the swing trading journey) ending July 19th 2024 which saw Nasdaq Financials, Russell 2000 and Canadian market move higher. Notable news this week was CrowdStrike’s outage which had global impact and saw CrowdStrike decline by 17.95% for the week.

Last week’s swing trading markets analysis saw Nasdaq Financials, Russell 2000 and Canadian market move higher. IWM Breakout appeared as a result of a lower United States inflation report.

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 fell by 2.35%

Last Week: rose by 0.82%

Moving Averages: the S&P 500 fell below the 10-day (exponential), 21-day (exponential) moving averages

Overall / Current Trend: up, reverting to long term trendline

Next week: I expect the S&P 500 to decline further towards the overall trendline, which is closer to the 50-day moving average

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.

This Week: the Nasdaq 100 fell by 4.34%

Last Week: fell by 0.34%

Moving Averages: the Nasdaq 100 finished below 10-day (exponential) and 21-day (exponential). This week saw CrowdStrike decline by 17.95% to end the week, which did not help the Nasdaq 100 this week

Overall / Current Trend: up, reverting to long term trendline

Next week: I expect the Nasdaq 100 to continue to decline towards the longer term trendline, similar to the fall from the March to April timeframe

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 rose by 1.65%

Last Week: rose by 3.14%

Moving Averages: above all moving averages

Overall / Current Trend: overall up, breakout from base

Next week: I expect the financials to edge higher given the show of strength this week compared to the overall market.

IWM Breakout – 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.

This Week: the Russell 2000 rose by 1.01%

Last Week: rose 5.26%

Moving Averages: above all moving averages

Overall / Current Trend: the Russell 2000 remains in a long term (although shallower) uptrend and is working through a breakout from base

Next week: I expect the Russell 2000 to trade higher due to the continued strength this week and Friday’s close was mid-range on lower volume than the the day before.

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 continues to trade above the $211 level although has pulled back recently toward the 10-ema.

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.

This Week: the Canadian stock market rose by 0.15%

Last Week: rose by 2.67%

Moving Averages: bounced off the 10-day exponential moving averages

Overall / Current Trend: working through breakout of $33.91 level

Next week: I expect the Canadian market to trade higher because of the back-to-back higher closes the last three weeks and the Canadian market remains above the prior $33.91 resistance level.

Looking at a slightly longer time horizon, we can see that the TSX has been trading sideways since April 2022 and has broken through the high / resistance level at $33.91 and remains trading above this previous 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.

This Week: Gold fell by 0.74%

Last Week: rose by 1.58%

Moving Averages: fell below the 10-day exponential and closed at the low of the trading range on Friday

Overall / Current Trend: Gold has been in an overall up trend since Nov 2018. More recently gold’s run has seen a pullback to its long term trendline and break through support.

Next week: I expect gold to continue to edge lower because Gold closed low in the daily trading range on Friday and Gold closed below the 10-day ema to end the week.

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.

Looking at the longer term view, Oil is trading in a range and has formed higher lows since mid 2023.

This week: oil fell by 2.80%

Last Week: fell by 0.40%

Moving Averages: Oil closed below its 10-day (exponential) and 21-day (exponential)

Overall / Current Trend: the long term trend of Oil is bullish, forming an ascending triangle with rising bottoms.

Next week: I expect oil to continue its decline due to the strong decline to close the week.

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.

Bitcoin is in a long term uptrend which became extended during the March to April 2024 period however has since reverted back to the overall trendline, and fallen through support.

This week: BTC rose by 7.05% this week

Last Week: rose by 0.71% last week

Moving Averages: BTC is now trading ABOVE the 10-day (exponential), 21-day (exponential) and 50-day moving averages

Overall / Current Trend: up, rising back to its overall trend

Next week: I expect Bitcoin to trade higher because it has moved above its moving averages, had a strong close to the week and is reverting back to its long term trendline.

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 fell by 0.09%

Last Week: rose by 1.49% last week

Moving Averages:

Overall / Current Trend: as there was no additional new on inflation or rate cuts. The longer term view is that TLT is in an uptrend as shown by rising bottoms, in the anticipation that rate cuts will materialize later this calendar year

Next Week: I expect TLT to trade sideways

Swing Trading Market Summary