Swing Trading Markets Analysis: Market Volatility #wk23

Here is the swing trading markets analysis for this week #23 ending August 9th 2024 which saw market volatility as declines across the Nasdaq 100 (QQQ), S&P 500 (SPY) recover some ground with higher highs and higher lows however trading volume has been decreasing.

Last week’s swing trading markets analysis saw declines across the Nasdaq 100 (QQQ), S&P 500 (SPY), US Oil (USO) and Bitcoin (GBTC). Comparing last week’s market action to this week, the word that comes to mind is volatility.

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 rose by 4.27%

Last Week: the S&P 500 fell by 2.44%

Moving Averages: the S&P 500 moved above the 10-day ema, but remains below the 21-day ema and 50-day moving averages

Overall / Current Trend: overall up, in the short term has formed higher highs and higher lows, however volume has been falling

Next week: I expect the S&P 500 to trade around the 10-day ema, as the 10-day ema and 21-day ema flatten out

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 rose by 6.19%

Last Week: the Nasdaq 100 fell by 3.67%

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

Overall / Current Trend: overall up, has formed higher highs and higher lows however under falling volume

Next week: I expect the QQQ to trade around the 10-day ema given the rise on falling volume

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 4.84%

Last Week: the Nasdaq Financials fell by 5.76%

Moving Averages: the Nasdaq Financials remain below the 10-day ema, 21-day ema moving averages. IXF remains above the 50-day moving average by the end of the day on Friday.

Overall / Current Trend: overall up, support at 50-day moving average

Next week: I expect the financials to trade around the 50-day moving average before its next leg higher

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.

This Week: the Russell 2000 rose by 4.39%

Last Week: the Russell 2000 fell by 7.16%

Moving Averages: the Russell fell below the 10-day ema, 21-day ema and 50-day moving average

Overall / Current Trend: the Russell 2000 remains in a long term (although shallower) uptrend and has moved closer to the 50-day moving average, however under falling volume

Next week: I expect the Russell 2000 to trade around the 50-day moving average allowing the 10-day ema and 21-day ema to flatten out and converge with the 50-day ema

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 has fallen back below the $211 level.

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 0.28%

Last Week: the Canadian S&P/TSX rose by 2.57%

Moving Averages: the Canadian S&P/TSX remained just below the 10-day ema and 21-day ema to close the week.

Overall / Current Trend: in a long term uptrend since October 2023, the Canadian market edged higher under falling volume to close the week

Next week: I expect the Canadian market to trade around the 10-day ema and 21-day ema allowing the 50-day moving average to catch up

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 rose by 1.59%

Last Week: Gold rose by 1.84%

Moving Averages: Gold remains above the 10-day ema and 21-day ema

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 and ended the week inline of the current 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 rose by 5.98%

Last Week: oil fell by 4.35%

Moving Averages: Oil is above its 10-day ema, but just below its 21-day ema. Oil remains below its 50-day moving average.

Overall / Current Trend: the long term trend of Oil is bullish forming higher lows. Recently oil has formed a double bottom perhaps the last shakeout needed to break through the resistance level.

Next week: I expect oil to move higher given the strong close this week under consistent volume

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 22.09%

Last Week: Bitcoin fell by 19.30%

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

Overall / Current Trend: overall long term trend up, in a basing period making lower highs and lower lows

Next week: I expect Bitcoin to trade sideways around the $48 support 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 fell by 3.49%

Last Week: TLT rose by 4.91%

Moving Averages: TLT remains above 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, TLT has moved higher on the continued anticipation that rate cuts will materialize later this calendar year

Next Week: I expect TLT to trade sideways as it has fallen from the over extended point at the start of the week

Swing Trading Market Summary