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Cautious Outlook as Tech Leads Pullback

Ronnie

• 1 min read
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Cautious Outlook as Tech Leads Pullback
  • QQQ closed below its 5 and 9 EMA on July 2 after three days of above-EMA closes
  • SPY failed to break new highs despite higher open on July 2
  • VIX curve now pointing lower, consistent with sideways or Choppy conditions
  • EMA clusters for both ETFs remain neutral pending reconfiguration

QQQ showed weakening momentum after a strong two-day rally, with a sharp reversal on July 2 closing near the day’s low. Price action indicates resistance near the 736 level and rising volume on down days suggests distribution. EMAs remain flat and clustered below price, failing to provide clear directional support.

SPY held above key moving averages but also showed signs of exhaustion with lower highs and a drop in volume on July 2 close. The VIX decline from 16.6 to 15.8 reflects easing short-term fear but also signals complacency amid structural shifts. Recent job data and AI profit-taking are driving rotation out of semiconductors and growth names, pressuring QQQ more than SPY.

Technical structure favors consolidation into late July FOMC meeting with breakout potential only after clear leadership reassertion

Disclaimer: Nothing you read on this site should be considered as financial advice. Do your own research and take responsibility for your own decisions.

Source: Qwen

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