Swing Trading Markets Analysis: QQQ SPY Drop Below 21-EMA #wk35

Here is the swing trading markets analysis for this week #35 where we saw QQQ and SPY drop below their 21-emas. All of the sectors are pulling back in advance of the the U.S. election on Nov 5th, and the inverted yield curve seems to be of concern.

Last week’s swing trading markets analysis we saw QQQ and SPY pullback to their 21-emas. Many of the sectors are also showing pullbacks to 21-emas. The U.S. election is coming up on Nov 5th and there continues to be tension in the middle east between Iran and Isreal.

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 fell by 1.98%

Next week: SPY fell through the 21 ema but found support at the 50-day. Will be interesting to see if we stay above the previous low or form a new lower low. Expect sideways trading next week.

RSP – Equal Weight S&P 500

The Invesco S&P 500 Equal Weight ETF is designed to provide investors with exposure to the performance of the S&P 500 Index while employing an equal-weighting strategy. Unlike traditional market-capitalization-weighted ETFs, RSP allocates the same weight to each of the 500 constituent companies, which can enhance diversification and reduce concentration risk in large-cap stocks. This approach often leads to different performance characteristics compared to standard S&P 500 ETFs, particularly in varying market conditions. Investors typically seek RSP for its potential to capitalize on smaller companies within the index and to achieve more balanced exposure across sectors.

This Week: the S&P 500 Equal Weight fell by 1.37%

Next week: RSP fond support at the prior low after dipping slightly below. Based on the drop below the 50-day and prior low, as well as the poor close more weakness is the expectation next week.

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 2.21%

Next week: QQQ fell through the 21-ema this week but did not touch the 50-day, not as close to a lower-low as SPY. Expect sideways trading next week.

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 0.82%

Next week: Russell 2000 fell this week breaking through the 50-day but recovered. If this remains a higher low the ascending triangle pattern will remain intact. Expect sideways trading next week.

Unlike the Nasdaq and SPY bullish run, the Russell 2000 has traded within an ascending triangle pattern since July 2024.

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 1.02%

Next week: fell below the 21-ema this week but recovered slightly, expect more sideways trading next 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 $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 fell by 0.22%

Next week: gold broke down through the 10-ema, expect test of 21-ema next week

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 3.25%

Next week: USO formed another higher low and is working its way back up the right hand side. Sellers are still in control.

Looking at the longer term view, Oil as of Aug-Sept has been in a downtrend

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: IBIT rose by 0.31%

Next week: IBIT still up overall but off recent highs. It will have to fall below $37 to break the uptrend.

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 1.56%

Next Week: still trending down toward the prior low

Swing Trading Market Summary – Risk OFF Market