Swing Trading Markets Analysis Sector Strength: Market Rises but Drops to Close the Week #wk43

Here is the swing trading markets analysis for this week #43 where we see SPY weaker than QQQ, as we head into next week we may see a test of the low from the Dec 18th Fed rate decision / commentary or a gap higher which would indicate continued strength. The strongest sectors are Consumer Discretionary (XLY), Technology (XLK) and Communication Services (XLC).

Last week’s swing trading markets analysis we saw majority of sectors below their 50-day line with communication services, technology and consumer discretionary showing relative strength following the Fed announcement on fewer interest rate cuts in 2025 which rattled the markets this week.

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 2.27%

Thoughts: following the market’s drop on the Fed interest rate announcement and rate outlook commentary the market snapped back above the 10/21 emas but gapped down to close the week – testing the 50-day and closing below the 10/21 emas.

A gap down open Monday will signal further weakness toward the 580 level (lower low test), where as a gap up open will signal potential move to a higher high.

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 rose by 1.57%

Thoughts: RSP has formed a lower low signaling a breakdown of most stocks in the S&P 500

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 2.38%

Thoughts: Nasdaq 100 tested its 21-ema to close the week but found support closing above the 21-ema. The Nasdaq-100 is looking much stronger than the S&P500 at the close of this week. We need to see the QQQ move above the last high or move sideways – not lower.

IWO – iShares Russell 2000 Growth ETF

The iShares Russell 2000 Growth ETF (IWO) tracks the Russell 2000 Growth Index, which is made up of small-cap companies with strong growth characteristics, such as above-average earnings growth and higher price-to-book ratios. IWO offers a more aggressive play on the small-cap space, focusing on businesses that are expected to grow rapidly, often with higher volatility but potentially greater upside. In contrast, the iShares Russell 2000 ETF (IWM) tracks the broader Russell 2000 Index, which includes both growth and value stocks, making it more diversified but less concentrated on the growth sector.

This Week: the Russell 2000 Growth rose by 1.72%

Thoughts: growth stocks show weakness forming a lower low and remaining well below the 50-day – wedging slightly higher this week

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 1.02%

Thoughts: did not quite form a lower low on the Fed rate decision, and has steadily moved higher but remains below the 50-day

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 essentially flat

Thoughts: after forming a higher lower, has been trading sideways

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 2.19%

Thoughts: moving sideways for now

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 fell by 0.72%

Next week: IBIT not immune to Fed announcements. pullback and close just above the election vwap (below the 10/21 emas)

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 1.62%

Next Week: long term interest rates rising so bond prices falling

Swing Trading Market Summary