SPY, QQQ: Crucial Trading Levels To Know This Week As Priced In By Options Market – Invesco QQQ Trust, Series 1 (NASDAQ:QQQ), SPDR S&P 500 (ARCA:SPY)
Major Wall Street indices closed in the red on Tuesday ahead of Federal Reserve Chairman Jerome Powell’s testimony before Congress. The Nasdaq Composite closed 0.16% lower while the S&P 500 lost 0.47%.
Another reason to cause concern among market participants is the higher-than-expected U.K. inflation. On Wednesday, the consumer prices index rose 8.7% from a year ago in May while core inflation, which excludes volatile food and energy, rose unexpectedly to 7.1% from 6.8%. Market participants appear concerned that interest rate hikes may continue longer than anticipated in the backdrop of persistent inflation.
Also Read: How To Trade SPY Options
Under these circumstances, here’s a look at the options market outlook for two popular exchange-traded funds:
1. SPDR S&P 500 ETF Trust SPY: The ETF closed 0.52% lower on Tuesday at $437.18. Options expiring on Friday indicate significant open interest accumulation at the $440 Call strike, indicating the level could act as a resistance this week. On the downside, the $430 Put strike is showing significant open interest accumulation and could act as strong support in case of a sell-off.
2. Invesco QQQ Trust Series 1 QQQ: The ETF closed 0.14% lower on Tuesday at $366.90. Options data shows relatively higher open interest accumulation at the $370 Call strike indicating the level may act as a decent resistance this week. On the downside, the $360 level could act as support this week.
Open interest levels only provide a fair idea about support and resistance levels. Any major news break or a macro event could lead to a significant movement in asset prices and cause a subsequent shift in open interest levels.
