Weekly Wisdom: Cold Front Freezes Market Trend

Greetings fellow traders and welcome to your January 18th edition of Weekly Wisdom: Levels to Know and Moves to Look For!

Now let's get to what we're currently seeing in these volatile markets and what we have our focus on going forward.

?

Taking a look back on this week, January 15 - 19:

• Markets have continued to stall out this week after last Thursday’s hotter than expected CPI report, even with Friday’s PPI being lighter than expected.??
• $SPX futures are currently stuck in a range between 4750 - 4825.
• Markets were closed on Monday in observance of Dr. Martin Luther King, Jr. Day.??
• Tuesday brought us a big miss for the Empire State manufacturing index at -43.7 vs -4.9 expected.??
• Wednesday's retail sales m/m were a beat at 0.6% vs 0.4% expected, as well as core retail sales m/m at 0.4% vs 0.2% expected. Import prices were also a beat at 0.0% vs -0.6% expected. Later in the morning we saw industrial production m/m give a beat at 0.1% vs -0.1% expected, with capacity utilization rate in-line at 78.6%. We then got business inventories m/m in-line at -0.1% along with a beat for the NAHB housing market index at 44 vs 39 expected.??
• Thursday’s weekly unemployment claims were a solid beat at 187,000 vs 206,000 expected. Housing starts were a beat at 1.46 million vs 1.43 million expected, building permits beat at 1.50 million vs 1.47 million expected, and the Philly Fed manufacturing index was a miss at -10.6 vs -6.6 expected.?
• Friday, January 19 ends the short week with existing home sales as well as the University of Michigan's consumer sentiment and inflation expectations index at 10:00 a.m. ET.

Here's what we are eyeing next week, January 22 - 26:

Level Highlights:

• $SPX futures failed to break over last week’s high of 4838, making a high of 4823 this week before rolling over to a low of 4746 on Wednesday.??
• Markets are now bouncing back to a high of 4797 on Thursday with the help of $AAPL, semiconductors, and other tech names.??
• Overall, $SPX futures are stuck in a range between 4750 and 4825 roughly since the second half of December, with a couple overshoots on either side since then.??
• Bulls are looking for a break above resistance 4825 while bears are looking for a break and close below 4750 support.?
• Market participants are battling the question of when the first rate cut will be, with Fed futures markets still looking at a rate cut as soon as March, yet FOMC members commenting that we most likely will not see one until June or July at the earliest.??
• $VVIX saw a big rally last Friday after we mentioned bulls should be cautious with the $VVIX trading into a major support zone into the end of last week.?
• $VVIX traded from a low of 75 last Friday to as high as 95 this week, now backing off those highs into the 87-88 area. Bulls are looking for this to continue lower back under the 85 level, while bears will be looking for a pivot off of 85 support to trade back higher.?

Upcoming News:

• Tuesday, January 23 starts the week’s data off with the Richmond Fed manufacturing index at 10:00 a.m. ET.??
• Wednesday, January 24 brings us flash manufacturing PMI and flash services PMI at 9:45 a.m. ET.??
• Thursday, January 25 starts off with advance GDP q/q, advance GDP price index q/q, durable goods orders m/m, core durable goods orders m/m, goods trade balance, preliminary wholesale inventories m/m, and weekly unemployment claims all at 8:30 a.m. ET. This is followed by new home sales at 10:00 a.m. ET.?
• Friday, January 26 ends the week with the headline and core PCE price index m/m, personal spending, and personal income m/m at 8:30 a.m. ET. We’ll then see pending home sales m/m at 10:00 a.m. ET.?

Here's Your Chart of the Week:

Via Bloomberg, SIA: TSMC’s Outlook Backs Hopes for Global Tech Recovery in 2024

Source: https://www.bloomberg.com/news/articles/2024-01-18/tsmc-profit-drops-less-than-feared-as-chipmakers-escape-trough?embedded-checkout=true

?

SPY Daily Update:

$SPY daily chart pulled back further this week after the CPI report last Thursday, but managed to bounce off of 471-470 support on Wednesday and is now pushing back up toward 477 resistance. As you can see, we have been back and forth between 477 resistance and 467ish support for almost a month now.??

SPY Weekly Update:

$SPY weekly chart is forming an inside week as we approach January OPEX (options expiration) this Friday. The low for the week is just under 470 and the high for the week is just under 477.?

Want to Trade With My Team? Click here!

-Patrick Hawe

?

?

Disclosures

Patrick Hawe's current positions:

*As of 2:42pm ET January 18, 2024

?

Patrick Hawe is an Associated Member of T3 Trading Group, LLC (“T3TG”), a SEC Registered Broker-Dealer & Member of FINRA/SIPC. All trades made are placed through T3TG.

T3 Live, LLC is a financial publisher that disseminates information about economic, business, and capital markets issues through various media. T3 Live is not a Broker-Dealer, an Investment Adviser, or any other type of business subject to regulation by the SEC, CFTC, state securities regulators or any “self-regulatory organization” (such as FINRA). Although T3 Live and T3TG are affiliated companies by virtue of common ownership, the companies are managed separately and engage in different businesses.

The programs that T3TG distributes (including articles, commentary, videos, blogs and social media postings) are for informational and educational purposes only. No one should consider the information disseminated by T3TG to be personalized investment advice, a recommendation to buy, sell or hold any investment, an offer (or a solicitation of an offer) to buy or sell any investment, or the provision of any other kind of investment advice. No one associated with T3TG is authorized to make any representation to the contrary.

T3TG provides information that viewers of its programs may consider in making their own investment decisions. However, any viewer will be responsible for considering such information carefully and evaluating how it might relate to that viewer’s own decision to buy, sell or hold any investment. Such decisions must be based on that viewer’s individual and independent evaluation of his or her financial circumstances, investment objectives, risk tolerance, liquidity needs, family commitments and other factors, not in reliance on any information obtained from T3TG.

Statements by any person (whether identified as associated with T3 Live, T3 Trading Group, or any other entity) represent the opinions of that person only and do not necessarily reflect the opinions of T3TG or any other person associated with T3TG.

It is possible that any individual providing information or expressing an opinion on any T3TG program may hold an investment position (or may be contemplating holding an investment position) that is inconsistent with the information provided or the opinion being expressed. This may reflect the financial or other circumstances of the individual or it may reflect some other consideration. Viewers of T3TG programs should take this into account when evaluating the information provided or the opinion being expressed.

Although T3TG strives to provide accurate and reliable information from sources that it believes to be reliable, T3TG makes no guarantees as to the accuracy, completeness, timeliness, or correctness of any such information. T3TG makes no guarantee or promise of any kind, express or implied, that anyone will profit from or avoid losses from using information disseminated through T3TG.

All investments are subject to risk of loss, which you should consider in making any investment decisions. Viewers of T3TG programs should consult with their financial advisors, attorneys, accountants or other qualified professionals prior to making any investment decision.

The risk of loss in trading equities, options, forex and/or futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage that is often obtainable in options trading may benefit you as well as conversely lead to large losses beyond your initial investment. Past results are not indicative of future results. No representation is being made that any account will or is likely to achieve profits similar to those shown.

T3 Trading Group, LLC is a Registered SEC Broker-Dealer and Member of FINRA/SIPC. All trading conducted by contributors associated with T3TG on the Virtual Trading Floor is done through T3TG. For more information on T3 Trading Group, LLC please visit www.T3Trading.com.