Key QQQ, SPY Levels to Watch in 2022

The equity’s Jan. 4 all-time high fell shy of a key level off the October 2020 bottom

Managing Editor
Jan 21, 2022 at 10:03 AM
facebook twitter linkedin


In the first trading week of 2022, Schaeffer’s founder and CEO Bernie Schaeffer found the refusal of the CBOE Market Volatility Index (VIX) and its associated exchange-traded notes (ETN’s) to throw anything resembling a tantrum over the negative start to 2022 (overlaid with Fed talk) to be of some interest. In turn, he constructed a table of key levels for SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust Series 1 (QQQ) on their weekly charts below, as well as gather several data points and markers of key levels to watch.

What become most notable for the SPY was that the equity’s Jan. 4 all-time high fell shy of a key level off the October 2020 bottom. SPY then closed on Jan. 7 below a key level off the October 2021 low. That same level runs in-line with the 50-day moving average, as seen in the chart below.

SPYCotwBGS

Meanwhile, looking at the QQQ you will find that the peak of $408.71 was captured on Nov. 22, and since then there have been just five closes above $400 for the security. Now, the tech-heavy trust is down 5% year-to-date amid the tech sector selloff, while the SPY boasts a less-severe 2% deficit so far for 2022. On Friday, Jan. 7, QQQ closed below the $380 level, which is around 5 points shy of a key October 2021 bottom, as well as the 80-day trendline. Also worth noting, the Jan. 7 close at the time marked only the second settlement below the 80-day moving average since Oct. 13.

QQQCotwBGS

While in neither case is there what Bernie Schaeffer would call a "technical breakdown operative" at this point, there are some red flags that can be waved. This is especially in the case of the QQQ, as an additional 3.3% decline would produce a full 10% correction off peak levels.

Subscribers to Chart of the Week received this commentary on Sunday, January 16.

 

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

 
Schaeffer's Daily Bulletin Offer
 


 


 
Special Offers from Schaeffer's Trading Partners