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SPY
SPY has shown another reversal after breaking above all-time highs, retesting, and reclaiming the 9 EMA area, but this has led to increased chop and a “death by a thousand cuts” environment for traders amid broader market weakness. For longer-term investors, the outlook remains bullish as long as price stays above the 100, 150, and 200 SMAs, where the market has historically trended positively without major issues — though corrections can occur, and recent price action near the all-time high (around 697) is critical, with potential for a flush lower if rejected, making risk management key in this uncertain setup.
QQQ
QQQ hit the anticipated resistance area before pulling back into its prior range, which is concerning as it failed to retest the breakout point from above and instead closed lower after a reversal day — never ideal after a breakout. While still above the 50-period moving average on an intermediate timeframe, there’s risk of short-term weakness, with a small base below that could lead to a flush lower if broken, signaling more downside for tech-heavy names in this momentum-shifting environment.
QQEW
QQEW mirrors the same problematic picture as QQQ, with downward-pointing moving averages in tech signaling poor momentum. Mean reversion trades may tempt some, but overall caution is warranted coming into the week, with limited constructive price action and a need for the market to rest before any stronger moves.
RSP
RSP broke above a key area but quickly returned to the range and retested it stubbornly, failing to break out as hoped and showing non-constructive price action that could lead to a retest of lower levels like 194 before any upside. This might flush out players with an undercut, test of the 50-period, and potential base-building in the range before a Feb/March breakout — but for now, the market lacks the strength for clean advances, requiring patience and risk awareness.
IWM
IWM (along with similar small-cap exposure) is now breaking down below the 21 EMA, a negative development that could lead to a flush toward the 50-period before any retest and base-building. With moving averages starting to point lower, this points to at least one to two weeks of choppy action, reinforcing the need for caution as the broader market digests recent gains without clear constructive momentum.
MDY
MDY shares a similar breakdown below the 21 EMA, with potential for more downside if it revisits key areas, as moving averages trend lower and signal one or two weeks of chop ahead. Like IWM, this mid-cap exposure reflects broader weakness and the market’s need to rest, with quick shifts possible but chop as the more likely near-term outcome.
VIX
The VIX is showing concerning signs as its moving averages converge, with volatility now trending above the 5, 9, 21, 50, 100, and 150 periods — and having rejected the 200 area twice, there’s risk of a base break if it closes decisively higher. This could signal a mini-correction (not necessarily a flash crash) rather than calm conditions, advising against aggressive buying into dips while above these levels, as weak stocks could weaken further and trigger emotional selling — track it closely, as it’s a key warning for heightened caution this week.
