Market analysis for Jan 27th, 2025

Welcome to Monday or should I say "profit day"? Let's talk about my mistake on Friday before we talk about our adjustment which should more than bail us out today. Our goal this year is risk management and consistency over profits. One thing we've learned with our three stage 0DTE entries is the longer you wait to add each stage the better it's worked out. I didn't wait long enough on our NDX on Friday. I had $700 at risk in stage one. That would have been a really nice profit if it hit (which it did) and not a big risk if it didn't but I got antsy and added the ratio too quickly. It wasn't needed. I needed to be more patient. We put on a bearish adjustment which should be more than enough to bring us right back into a nice profit this morning but...you can't depend on the /NQ being down 800 points every time you screw up. We'll take our profit at the open and count our blessings and try to do better today.  We've already got our long scalps working and those are already profitable so there's no excuses if we don't have a banner day today. Here's my results from Friday. If we can open up with a $9,000 profit on our NDX adjustment that would get us going today. Keep on crashing market!

Not surprising with the futures selling off this morning that our technicals are bearish.

​March S&P 500 E-Mini futures (ESH25) are down -2.43%, and March Nasdaq 100 E-Mini futures (NQH25) are down -3.78% this morning as worries mount that a cheaper artificial intelligence model from China could challenge the supremacy of U.S. technology.
Chinese artificial intelligence lab DeepSeek’s latest chatbot threatened to disrupt U.S. firms’ dominance in AI, triggering a global selloff in the tech sector. DeepSeek announced that it developed AI models nearly on par with American rivals, despite using inferior chips and less data. This has raised questions about the lofty valuations of AI-related stocks and Silicon Valley’s business model, which relies heavily on extensive research and development spending. On Monday, DeepSeek’s AI Assistant surpassed ChatGPT to become the highest-rated free application on the U.S. Apple App Store.
“While it remains to be seen if DeepSeek will prove to be a viable, cheaper alternative in the long term, initial worries are centered on whether U.S. tech giants’ pricing power is being threatened,” said Jun Rong Yeap, a market strategist at IG Asia.
U.S. President Donald Trump’s weekend spat with Colombia further contributed to the bearish sentiment. Trump initially announced sweeping tariffs on the country but abruptly reversed course after reaching a deal on the return of deported migrants.
Investors now look ahead to earnings reports from some of the biggest tech heavyweights, the Federal Reserve’s interest rate decision, as well as the release of the Fed’s favorite inflation gauge and other key economic data later in the week.
In Friday’s trading session, Wall Street’s major equity averages ended lower. Texas Instruments (TXN) slumped over -7% and was the top percentage loser on the S&P 500 and Nasdaq 100 after the analog chipmaker gave a lackluster Q1 forecast. Also, CF Industries Holdings (CF) slid more than -7% after JPMorgan Chase downgraded the stock to Underweight from Neutral with a price target of $75. In addition, CSX Corp. (CSX) fell over -2% after reporting weaker-than-expected Q4 revenue. On the bullish side, Meta Platforms (META) rose more than +1% after CEO Mark Zuckerberg said the company plans to invest up to $65 billion in AI projects in 2025.
Economic data released on Friday showed that the University of Michigan’s U.S. consumer sentiment index was revised downward to 71.1 in January, weaker than expectations of 73.3. At the same time, the U.S. January S&P Global manufacturing PMI rose to 50.1, stronger than expectations of 49.8 and the fastest pace of expansion in 7 months. Also, U.S. existing home sales rose +2.2% m/m to a 10-month high of 4.24M in December, stronger than expectations of 4.19M.
The U.S. Federal Reserve’s interest rate decision and Chair Jerome Powell’s post-policy meeting press conference will take center stage this week. After cutting rates three times in late 2024, Fed officials are widely expected to keep them unchanged on Wednesday, given signs of a strong U.S. economy. Market watchers’ focus will center on any additional clues about whether and when interest rates might be lowered further. U.S. rate futures currently price in slightly less than two interest rate cuts this year, with the first expected no earlier than June. 
Fourth-quarter earnings season shifts into high gear, and investors await fresh reports from high-profile companies this week, including Apple (AAPL), Tesla (TSLA), Microsoft (MSFT), Meta Platforms (META), AT&T (T), T-Mobile US (TMUS), Starbucks (SBUX), ServiceNow (NOW), IBM (IBM), Intel (INTC), Lam Research (LRCX), Visa (V), Mastercard (MA), Caterpillar (CAT), Comcast (CMCSA), United Parcel Service (UPS), Altria (MO), Exxon Mobil (XOM), Chevron (CVX), AbbVie (ABBV), Lockheed Martin (LMT), and General Motors (GM).
On the economic data front, the December reading of the U.S. core personal consumption expenditures price index, the Fed’s preferred inflation gauge, will be the main highlight. Investors will also be monitoring a spate of other economic data releases, including U.S. GDP (first estimate), the Conference Board’s Consumer Confidence Index, Durable Goods Orders, Core Durable Goods Orders, the S&P/CS HPI Composite - 20 n.s.a., the Richmond Fed Manufacturing Index, Goods Trade Balance, Wholesale Inventories (preliminary), Crude Oil Inventories, Initial Jobless Claims, Pending Home Sales, the Employment Cost Index, Personal Income, Personal Spending, and the Chicago PMI.
In addition, Fed Governor Michelle Bowman will deliver brief remarks on the economy and perspectives on mutual and community banks on Friday.
Today, investors will focus on U.S. New Home Sales data, which is set to be released in a couple of hours. Economists foresee this figure to stand at 669K in December, compared to 664K in November.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.534%, down -1.93%.

Heavens knows we've got plenty of earnings and economic catalysts this week to keep it interesting. 
We've got some I.V. coming back into the markets today with the futures selloff. It would be best for us if we keep crashing this morning. Don't rebound until we can grab our NDX profit.

My bias or lean today is slightly bullish. Now, let me quantify that! /NQ futures were down over 1,000 points when we put on our long /MNQ scalp and we are already "up" 200 points from there so when I say bullish, yes, we'll probably finish in the red today but up off the lows of early morning. The damage looks bad but in reality its just sucked out the last weeks positive days. Let's look at the charts below.

All today's done so far is take us back to Jan. 17th. Just a "flesh wound" 

Let's hope we can score a nice victory on our bearish NDX setup at the open and cruise on our long /MNQ scalp to a nicely profitable day. 

Trade docket today is going to focus on our /MNQ scalp. That could yield a massive gain. I don't remember our last losing day scalping and I don't intend to have one today. VIX or short vol trade of some kind. BA earnings JBLU earnings, BTC swing trade. GME?, We may add to a few of our long pairs setups. 1HTE, 0DTE's. We already booked out profit on Nat gas. That was a $3,400 profit. 

Let's look at our intra-day levels:
​/ES: 6075 is new resistance with 5947 working as support.

/NQ: 21,556 is new resistance with 20,756 working as support.

BTC:  We've got a long swing trade already working this morning that is just working into the green. 105,280 is new resistance with 96,740 working as support. 

Let's have a great day today folks and hope we don't rebound too much before we can cash out of our NDX trade.