QQQ, SPY, VIX: Week Wrap

QQQ and SPY closed the week on a bearish note, slipping below their short‑term EMAs after a modest rally. QQQ fell from 623.9 on Dec 25 to 614.3 on Dec 31, slipping under EMA5 (618.36) and EMA9 (618.40) by the final day, while still hovering just above EMA50 (614.79). SPY mirrored the move: from 690.4 to 681.9, breaking below EMA5 (685.77) and EMA9 (685.62) on Dec 31, though staying modestly above EMA50 (679.65). Both ETFs showed flat EMA values across the period, indicating recent price consolidation before the break.

VIX settled at 14.20, a low level that signals calm markets and limited implied volatility. The low VIX backdrop could set the stage for a volatility pop if price momentum continues to deteriorate.

Fundamental backdrop was mixed. The Commerce Department reported Q3 GDP at 4.3%—a strong headline that was partly offset by softer consumer confidence (down to 89.1) and a 2.2% decline in durable‑goods orders. Fed minutes hinted at potential rate cuts in 2026, while initial jobless claims hit a three‑year low of 199,000, reinforcing a resilient labor market.

From a technical standpoint, the breach of the short‑term EMAs suggests a near‑term correction for both QQQ and SPY. Traders should watch for a possible rebound above EMA20 (QQQ ≈ 617.6; SPY ≈ 683.9) or a deeper drop through EMA50. With VIX remaining subdued, any shift in sentiment could trigger a quick volatility expansion. Keep positions tight and monitor key support/resistance levels as the new year begins.