Swing Trading Markets Analysis: Market Reversal #wk27

Here is the swing trading markets analysis for this week #27 ending September 6th 2024 which saw market reversal as equities traded lower with S&P 500, Nasdaq 100, Russell 2000 all falling below key moving averages. Gold is resisting declines while Bitcoin is falling. With the strongest swing trading sectors being: utilities, real estate, consumer staples, healthcare, financials.

Last week’s swing trading markets analysis  saw saw equities trading slightly higher with SPY near breakout and Gold, Oil, Bitcoin retreating slightly.

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 3.62%

Last Week: the S&P 500 rose by 0.05%

Moving Averages: the S&P 500 10-day ema and 21-day ema both remain above the 50-day moving average as of the close of week. The 10-day ema is close to crossing the 21-day ema and both are trending down as the 50-day is flat.

Overall / Current Trend: overall up, in the short term the S&P 500 moved significantly below the 50-day moving average.

Next week: I expect the S&P 500 to trade lower and may find support at the 540 level, or may fall to the 510 level closer to the 200-day

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 5.53%

Last Week: the Nasdaq 100 rose by 0.71%

Moving Averages: the Nasdaq 100 is below its 50-day and the 10-day ema has fallen below the 21-day ema, both 10-day and 21-day are trending down

Overall / Current Trend: overall up, the QQQ has significantly broken its long term trendline

Next week: I expect the QQQ to trade lower probably to the 200-day and may find support there

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 fell by 5.40%

Last Week: the Russell 2000 fell by 0.93%

Moving Averages: the Russell 10-day ema has declined below the 21-day ema and both are trending down

Overall / Current Trend: overall the Russell 2000 remains in a long term (although shallower) uptrend, in the short term has declined through the 50-day and could re-test the 200 level / 200-day moving average

Next week: I expect the Russell 2000 to trade lower given the lack of support areas between the close and the 200-day

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 rapidly declined 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 fell by 1.65%

Last Week: the Canadian S&P/TSX fell by 0.84%

Moving Averages: the 10-day ema is above the 21-day ema and both are above the 50-day, however are now declining

Overall / Current Trend: in a long term uptrend since October 2023, the Canadian market was near highs but has closed the week below the 10-day and 21-day at the low end of the trading range

Next week: I expect the Canadian market to trade around the 34.5 level where it seems to have found support

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 broken out of a short base.

This Week: Gold fell by 0.77%

Last Week: Gold fell by 0.93%

Moving Averages: 10-day ema and 21-day ema and 50-day are stacked the right way and still in an up trend, although shallower

Overall / Current Trend: Gold has been in an overall up trend since 2024 and has cleared the previous base pivot of mid April, holding at the 21-ema

Next week: I expect gold to continue to trade sideways or slightly higher – due to interest rate cuts, U.S. election uncertainty and ongoing questionable stability in the middle east

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 and lower highs since late 2023

This week: oil fell by 8.33%

Last Week: oil fell by 4.79%

Moving Averages: Oil 10-day ema is well below the 21-day ema and 50-day with the 10-day ema and 21-day ema in steep downtrends

Overall / Current Trend: the long term trend of Oil is higher lows and lower highs and recently Oil has broken lower below the wedge and is well below the 200-day

Next week: I expect oil to trade lower having blown through the 200-day and may find support at the $67-$66 level or $64 level

IBIT – iShares 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 iShares Bitcoin Trust ETF seeks to reflect generally the performance of the price of bitcoin.

Bitcoin was in an uptrend during the Feb to March 2024 period however has since been forming lower highs and lower lows.

This week: Bitcoin fell by 10.24%

Last Week: Bitcoin fell by 8.14%

Moving Averages: Bitcoin 10-day ema is below the 21-day ema – with both in down trends, below the 50-day

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 lower given its continued move down below all moving averages, it may find support at the $28 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 rose by 1.96%

Last Week: TLT fell by 2.21%

Moving Averages: 10-day ema, 21-day ema, 50-day, 200-day mas are stacked the right way with the 10-day and 21-day in uptrends

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

Swing Trading Market Summary – Markets Reversal