Previous update, January 27th:
While we could take time to chest thump our current trades and join to the crow cheerleading current market action or regret our failure for not adding $TNA on time we will address a more serious situation: Market is about to hit 1% of the gray 1-2 on this chart (link), so, as we considered on January 9th, we will update support for the market to 2187, this means stops should be trailed and cores should be reduced to protect profits. Initial signals for concern should come once market breaks under 2291 followed by a break under 2274.
Looking at today’s update:
The short term razzmatazz wave is showing a low int tomorrow Tuesday, January 31st. Then a rebound into February 2nd – 4th. At the same time PCR expiring tomorrow is into standard territory at 2.077; meaning the call for lows into January 30th and 3st is valid.
After this rebound on indexes that is projected for February 2nd-4th, both, and this is important, short term and long term razzmatazz wave are pointing lower into mid’s of February, so based on open interest we can’t make a bullish case for the market. We must adjust our expectations and assume a retrace will be seen for as long as $SPX is under 2311 $SPX. We would not trade a breakout above 2311 based on current internals, might be short lived.
Moores’ 2C-P is at 96.08, adding confidence to our call for lower lows.
Japhy the trader from Data Trader pro: $VIX is under 11, for the first time since august 2015. VIX put/call is back to extreme lows. These are the types of areas that CAN (not will, can!) start violent reversals. i am looking to start small vol longs soon, next 1-2 days max, but not in $VXX or its leveraged brethren
Cyclical Analysis matches interestingly well the Open Interest projections. Charts will be provided per required in our Chat Room
We maintain our expectation for lower levels on indexes, price is not diverging from our call, so we will consider we are right until price proves something different.
The Following Charts were Posted in our Chat Room which we constantly provide updated view on market conditions along with trade setups
$ES_F 60 Minute Chart Traget – needs to hold
$ES_F Daily chart
$SPX Weekly Update
Geopolitical Events
- Tuesday the FOMC begins a two day meeting. Also on Tuesday a joint ECB and European Commission meeting will meet and a Bank of Japan Rate decision is due.
- Thursday the BOE will release its latest interest rate decision.
- Friday EU Heads of State will meet. Federal Reserve Chicago President Charles Evans will speak on Friday to finish out the week.
Economic Releases
Releases of note this week include the weekly chain store sales, oil/gas numbers, mortgage applications, jobless claims and personal income, Chicago PMI, consumer confidence, construction spending, ISM Manufacturing PMI, Q4 Productivity, nonfarm payrolls with the unemployment rate and factory orders.
Earnings Releases:
Notable releases include $EPD $GGP $AAPL $XOM $FB $MO $AMZN $V $HMC $PSX – Join our Group for earning trades
Economic News:
Monday, January 30:
- December Personal Income is due out at 8:30 a.m. EST and is expected to rise to 0.4% from 0%.
- Markets are closed in China for the Lunar New Year. South Korea, Taiwan and several other Asian countries are closed for trading as well. China is closed until Friday.
Tuesday, January 31:
- The Bank of Japan rate decision is due.
- The S&P/Case Schiller Home Price Index for November is due out at 9:00 a.m. EST and is expected to drop to 5.0% from 5.1%.
- January Chicago PMI is due out at 9:45 a.m. EST and is expected to rise to 55.5 million from 54.6.
- January Consumer Confidence is due out at 10:00 a.m. EST and is expected to fall to 113 from 113.70.
- The European Central Bank (ECB) and European Commission will hold a joint meeting in Frankfurt.
- The Federal Reserve Open Market Committee (FOMC) begins its two day meeting that concludes on Wednesday with an interest rate announcement.
Wednesday, February 1:
- ADP Payroll for January is due out at 8:15 a.m. EST and is expected to rise to 165,000 from 153,000.
- December Construction Spending is due out at 10:00 a.m. EST and is expected to fall to 0.30% from 0.91%.
- January ISM Manufacturing PMI is due out at 10:00 a.m. EST and is expected to rise to 55 from 54.70.
- The first Federal Reserve Open Market Committee (FOMC) interest rate decision of 2017 is due out at 2:00 p.m. EST.
- Monthly Truck and Car Sales are due out at 2:00 p.m. EST. The only short squeeze of note in this space is Tesla Motors (TSLA).
Thursday, February 2:
- Challenger, Gray & Christmas Monthly Job Cuts are due out at 7:30 a.m. EST; last month they rose 42.2%.
- The Bank of England (BOE) is out with its latest interest rate decision before markets open.
- Q4 Productivity is due out at 8:30 a.m. EST and is expected to fall to 0.9% from 3.1%
Friday, February 3:
- January Nonfarm Payrolls are due out at 8:30 a.m. EST and are expected to improve to 175,000 from 156,000. The unemployment rate is expected to remain at 4.7%.
- December Factory Orders are due out at 10:00 a.m. EST and are expected to rise to 1.4% from -2.4%.
- European Union Heads of State meet.
