Swing Trading Markets Analysis: QQQ and SPY Bearish Market Warning Sign #wk21

Here is the swing trading markets analysis for this week #21 ending July 26th 2024 which saw Nasdaq 100 (QQQ) and S&P 500 (SPY) continue to decline. For both the QQQ and SPY, their 10-day ema has crossed below the 21-day ema which is a bearish market warning sign

Last week’s swing trading markets analysis saw Nasdaq Financials, Russell 2000 and Canadian market move higher. The impact of the CrowdStrike outage continued this week with recovery ongoing and damage estimated in the Billions.

SPY – S&P 500 (Bearish Market Warning Sign)

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 1.55%

Last Week: the S&P 500 fell by 2.35%

Moving Averages: the S&P 500 remains below the 10-day ema, 21-day ema. the SPY crossed below the 50-day moving average during the week, however ended above to 50-day to close the week.

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

Next week: I expect the S&P 500 to trade around the 50 day moving average, a convergence of the 10-ema, 21-ema and 50-day looks likely. Notice that the 10-day ema has crossed below the 21-day ema on the SPY chart, which is a bearish market warning sign.

QQQ – Nasdaq 100 (Bearish Market Warning Sign)

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 3.78%

Last Week: the Nasdaq 100 fell by 4.34%

Moving Averages: the Nasdaq 100 remains below the 10-day, and 21-day ema and 50-day moving average.

Overall / Current Trend: overall up, currently 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. Notice the 10-day ema has crossed below the 21-day ema which is a bearish market warning sign.

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 2.97%

Last Week: the Nasdaq Financials rose by 1.65%

Moving Averages: the Nasdaq Financials remains above the 10-day ema, 21-day ema and 50-day moving averages

Overall / Current Trend: overall up, breakout from base

Next week: I expect the financials to edge higher given the show of strength by the higher close to the week and strong close Friday.

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 3.00%

Last Week: the Russell 2000 rose by 1.01%

Moving Averages: above all moving averages

Overall / Current Trend: the Russell 2000 remains in a long term (although shallower) uptrend having broken out from the 211 level base and is working towards the 227 level

Next week: I expect the Russell 2000 to trade higher due to the continued strength this week and Friday’s higher open and close to finish the 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 continues to trade above the $211 level and is working its way toward the next key level at 227.

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 S&P/TSX rose by 0.55%

Last Week: the Canadian S&P/TSX rose by 0.15%

Moving Averages: the Canadian S&P/TSX dipped below the 10-day ema almost touching the 21-day ema intra week, however closed the week strong above all moving averages, in the upper half of the trading range on Friday.

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

Next week: I expect the Canadian market to trade higher because of the breakout from the high tight flag to end the trading week.

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.

Gold formed a long base since mid-2021 until early 2024. Gold ran up in 2024 and has since been forming another base.

This Week: Gold fell by 0.52%

Last Week: Gold fell by 0.74%

Moving Averages: Gold remains below the 10-day ema and 21-day ema, although did close close to the 21-day ema by end of week

Overall / Current Trend: Gold has been in an overall up trend since 2024. More recently gold’s run has seen a pullback and is forming a new base.

Next week: I expect gold to continue to trade sideways as it is in a base building phase.

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 1.37%

Last Week: oil fell by 2.80%

Moving Averages: Oil remained below its 10-day ema and 21-day ema. Oil also moved below the 50-day moving average to close the week.

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 move below the 50-day moving average to close the week. Notice the 10-day ema has crossed below the 21-day ema which is a bearish market warning sign.

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: Bitcoin rose by 0.55%

Last Week: Bitcoin rose by 7.05%

Moving Averages: Bitcoin remains trading above the 10-day ema, 21-day ema and 50-day moving averages

Overall / Current Trend: overall up, currently building a new base

Next week: I expect Bitcoin to trade higher because it has moved above its moving averages, and had a strong close to the week

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 0.43%

Last Week: TLT fell by 0.09%

Moving Averages: TLT has fallen below its 10-day ema and 21-day ema

Overall / Current Trend: 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