|NYSE||Adv 1070||Dec 1891||Vol 1.03 bln|
|Nasdaq||Adv 1269||Dec 1700||Vol 1.72 bln|
IN THE NEWS HIGHLIGHTS:
- US equities markets are split.
- Crude oil under pressure.
- U.S. Dollar Index sold off.
RECAP– The US equities markets were split today with the Dow and S&P closing lower while the Nasdaq recorded a moderate gain. Crude oil sold off sharply erasing the last 3 days of gains. The US dollar also sold off which allowed gold and silver to bounce back.
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- Nothing major today.
- January 10: JOLTS Job Openings
- January 11: Crude Oil Inventories
- January 12: Unemployment Claims
- January 12: Fed Chair Yellen Speaks
- January 12: Core Retail Sales m/m
- January 12: PPI m/m
- January 12: Retail Sales m/m
- January 12: Prelim UoM Consumer Sentiment
FedWatch February 1 Rate Hike Probability for January 9: 2.0% (View the probability chart here)
A Look At The S&P 500 Chart – KEY Levels
- RSI is above 50.
- On Balance Volume is at its moving average.
- Price action has outpaced its moving averages.
- This chart is overextended. There has been a run up of nearly 200 points or roughly 10% since its low in November.
- Very early, but this looks like a potential double top should it form. The break-line for support is located at 2230. The next level of support would be located around 2190-2180.
A Look Into the Heat Map
The market clearly bearish on the day. Technology and Healthcare were the only bullish sectors holding the market up.
VIX – 11.56
Oil (USO) – Bullish
Ag (DBA) – Bearish
GLD – Bearish – Gold has been in a “relief rally” following months of constant selling. It should continue to fade higher as the US dollar retracements. By no means am I bullish on Gold or Silver as they are still in a long term bearish trend and this is more of a temporary retracement. I would like to see a bottoming pattern before changing my bias.
SLV – Bearish – Same as gold.
UUP – USD weighted ETF – Bullish – The bullish momentum has slowed in the US Dollar and has been consolidating in this area.
SOLON’S TRADING THOUGHTS
The market was mixed today, although most sectors were bearish. A lot of the bullish momentum has drained out of the market at this point. I’m very cautious at these levels because we have seen a historic rally without much of a correction. Also, when I see a chart that looks like this which is overextended, the first thing I think of is a reversal. It is still way too early to call it an “M” reversal pattern, but should it drop a little further, I am eyeing 2230 as a critical breaking point. Volatility is very low, so this is a good area to buy puts on a portfolio. I would also favor calendar spreads instead of credit spreads as a way to hedge myself against volatility risk.
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