ES/SPY Weekly Levels (Jan 3-6)

The S&P index ended the year with a 19% decline and closed 359 points above its 52-week low after falling 0.23% last week. The new trading year begins on Tuesday with a bearish bias, as the price remains below the 9/21/55 exponential moving averages. However, the S&P has shown relative strength compared to the NQ, with the price trading above the June 17th low in the middle of the bearish channel. Market focus is on three key pivots: the October 13th low, the June 17th low, and the December 13th high. The 2020 peak may come into play if a panic sell-off occurs. Historically, January has been a weak or flat month for the S&P, with an average closing of -0.30% over the past 20 years. The current market narrative suggests the possibility of a recession, and market participants are anticipating the release of the FOMC minutes on Wednesday and the NFP on Friday. Happy New Year.

• S&P down .23 % last week, down 19% for the year & 359 pts off 52 week low
• New trading year begins Tuesday
• Bias remains bearish with price below 9/21/55 emas
• S&P has shown relative strength to NQ with price above June 17th low trading in the middle of the bearish channel.
• Focus is on 3 key pivots. Oct 13th low, June 17th low & Dec 13th high
• The 2020 peak may be in play if a panic selloff occurs
• Jan historically weak/Flat month for S&P. Closing an average of -0.30% over past 20years.
• Current market narrative = recession
• FOMC Minutes due out Wed & NFP due out Friday

WEEKLY EVENTS

Monday Market Closed
Tuesday US S&P Manufacturing
Wednesday US ISM Manufacturing, US JOLTS & FOMC Minutes
Thursday US International Trade, US Initial Jobless Claims, Services PMI & EIA Crude Inventories
Friday US Unemployment Rate, US Average Earnings & Non Farm Payrolls

NOTABLE EARNINGS

Monday Market closed
Tuesday BHP
Wednesday Nothing notable
Thursday LW, NTDOY, STZ, WBA
Friday Nothing notable

BULLISH NOTES

New year/month = Potential inflows
Price above June 17th low
Oversold conditions
Low VIX
Potential positive reaction to FOMC Minutes & NFP
Dropping DXY
Potential reversal in bond yields
Earning season starts mid Jan
200 sma within striking distance

BEARISH NOTES

Price below 9/21/55 ema
Jan weak/flat month for S&P
Recession fears
Market participants expect at least one more big drop
Potential negative reaction to FOMC minutes & NFP
Long term trendline magnet
Expectation that all 2020 gains will be reversed.

Commentaire:

ES continues to move sideways within a larger bearish flag pattern. Making another run at the bottom of the flag this morning. A break below would likely take it down to the 618 fib. Below that the June 17th low.