Swing Trading Markets Analysis: SPY Base Breakout #wk29

Here is the swing trading markets analysis for this week #29 ending September 20th 2024 which saw SPY breakout after the fed confirmed a 0.50% rate cut. The QQQ and IWM moved higher as well but remained below breakout levels after running into resistance. Bitcoin is showing signs of changing to an uptrend.

Last week’s swing trading markets analysis saw markets reclaim key moving averages with the S&P 500, Nasdaq 100, Russell 2000 moving higher. Oil was down and Bitcoin started to reverse its downtrend.

SPY Base Breakout – 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 1.16%

Last Week: the S&P 500 rose by 3.19%

Moving Averages: the S&P 500 moving averages are stacked the right way and trending up

Overall / Current Trend: overall up in the third base, has broken through the base pivot

Next week: closed the week at the high end of the range above key levels so expect next week to move higher

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 1.95%

Last Week: the Nasdaq 100 rose by 4.91%

Moving Averages: the Nasdaq 100 is above all moving averages, the 50-day is still trending down

Overall / Current Trend: overall up working through the third base, the QQQ was rejected at the resistance level from mid-August

Next week: I expect the QQQ to trade sideways around the resistance level

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 1.82%

Last Week: the Russell 2000 rose by 4.16%

Moving Averages: moving averages are trending up stacked the right way

Overall / Current Trend: overall the Russell 2000 remains in a long term uptrend, IWM could not break through the August downside reversal and is below the last pivot

Next week: I expect the Russell 2000 to trade sideways around the last pivot level

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 retaken the 221 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 0.89%

Last Week: the Canadian S&P/TSX rose by 2.14%

Moving Averages: all moving averages are stacked the right way and trending up

Overall / Current Trend: in a long term uptrend since October 2023, the Canadian market is making higher lows

Next week: I expect the Canadian market to trade higher

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 $35 level 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 rose by 1.44%

Last Week: Gold rose by 3.21%

Moving Averages: the moving averages are stacked the right way and trending up

Overall / Current Trend: Gold has been in an overall up trend since October 2023 and has broken above the resistance level from mid August

Next week: I expect gold to continue to trade higher – due to the recent 0.5% interest rate cut, U.S. election uncertainty and ongoing questionable stability in the middle east

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.

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 3.23%

Last Week: oil rose by 1.97%

Moving Averages: 10-ema, 21-ema and 50-day are reverse stacked, however the 10-ema and 21-ema are trending up

Overall / Current Trend: the long term trend of Oil is sideways and recently Oil has broken lower below the wedge and is well below the 200-day but made some progress higher this week

Next week: I expect oil to make progress towards the 200-day, will watch for another lower high indicating a continued move lower

Looking at the longer term view, Oil is trading in a range and has formed higher lows and lower highs since late 2023 and has broken through support as of September

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.

This week: Bitcoin rose by 7.51%

Last Week: Bitcoin fell by 10.24%

Moving Averages: the 10-ema, 21-ema are stacked the right way and trending up, moving towards the 50-day line

Overall / Current Trend: overall has been in a downtrend, recently has retaken the 50-day and tested the last pivot but not broken through and closed tightly below the resistance level

Next week: I expect IBIT to break through the last pivot currently acting as resistance given the strong move up including gap up above the 50-day this 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 1.7%

Last Week: TLT rose by 1.03%

Moving Averages: 10-day ema and 21-day ema have turned down. All moving averages are stacked the right way

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 anticipation that rate cuts will materialize which they did in the form of a 0.5% cut.

Next Week: I expect TLT to trade sideways around the 21-ema

Swing Trading Market Summary – SPY Base Breakout