Market analysis for Jan. 6th, 2024

Welcome to a new week traders! I hope you all had a great weekend. Our family sent the last week up at our cabin and while we had a lot of fun activities, it was spending time with loved ones that was most meaningful. We are a little depressed now. Thanksgiving though New years is our favorite time of year. I hope all is well with you all! We had a pretty solid day Friday. We waited quite a while into the day before starting our 0DTE's and then we waited even longer to add to them. Did it cost us premium? Absolutely! Did it give us more visability and an easier day? Yes. We've tried to actually LOWER our income goals for this year. It should be (obviously) easier to obtain and take less capital commited on a daily basis. If we can average a $1,000 a day profit this year I think most of our traders will be happy with our program. Here's our results from this past Friday.

Let's take a look at the markets to start off another holiday shortened week.
I've talked alot about the "cliff" that we were sitting on and how the bulls really needed to defend those levels. They did that and then so on Friday and it looks like the futures are implying a continuation of that bullish rebound today. 

We've got the SPY and QQQ both back above their 50DMA now and the DIA and IWM still look week but seem to have stopped their slide and are at least consolidating.

March S&P 500 E-Mini futures (ESH25) are up +0.45%, and March Nasdaq 100 E-Mini futures (NQH25) are up +0.71% this morning, pointing to a strong opening on Wall Street, while investors looked ahead to the publication of the minutes of the Federal Reserve’s latest policy meeting, comments from Federal Reserve officials, and a raft of U.S. labor market data.
Technology stocks led the gains in U.S. equity futures as spending plans by Microsoft highlighted the continued demand for artificial intelligence infrastructure, with chip heavyweights Nvidia (NVDA) and Advanced Micro Devices (AMD) rising over +2% in pre-market trading.
In Friday’s trading session, Wall Street’s major equity averages closed in the green. Megacap technology stocks advanced, with Tesla (TSLA) climbing over +8%. Also, chip stocks gained ground, with ARM Holdings (ARM) surging more than +10% and Nvidia (NVDA) rising over +4%. In addition, Block (SQ) advanced more than +6% after Raymond James upgraded the stock to Outperform from Market Perform with a $115 price target. On the bearish side, U.S. Steel (X) slumped over -6% after U.S. President Joe Biden blocked the $14.1 billion sale of the company to Japan’s Nippon Steel.
Economic data released on Friday showed that the U.S. ISM manufacturing PMI unexpectedly rose to a 9-month high of 49.3 in December, stronger than expectations of a decline to 48.2.
Richmond Fed President Thomas Barkin said Friday that he still sees upside risks to inflation and growth, which positions him in the camp of “wanting rates to stay restrictive for longer.” Also, San Francisco Fed President Mary Daly said on Saturday that although there has been considerable progress in reducing inflationary pressures over the past two years, inflation remains “uncomfortably above our target.” In addition, Fed Governor Adriana Kugler said, “Obviously our job is not done. We’re not at 2% yet, so we’re definitely aiming still to get there, and we know the job is not done.”
U.S. rate futures have priced in a 90.9% probability of no rate change and a 9.1% chance of a 25 basis point rate cut at January’s monetary policy meeting.
Meanwhile, the U.S. stock markets and the federal government will be closed on Thursday in observance of the National Day of Mourning for former President Jimmy Carter. Also, the bond market will close at 2 p.m. Eastern Time on Thursday, per the recommendation of the Securities Industry and Financial Markets Association. The closures follow a long-standing American tradition where financial institutions halt operations after the death of a president.
Market watchers will be closely following the U.S. Nonfarm Payrolls report for December this week. Other noteworthy data releases include the U.S. JOLTs Job Openings, the ISM Non-Manufacturing PMI, Exports, Imports, Trade Balance, ADP Nonfarm Employment Change, Initial Jobless Claims, Crude Oil Inventories, Consumer Credit, Average Hourly Earnings, the Unemployment Rate, and the University of Michigan’s Consumer Sentiment Index (preliminary).
Also, investors will closely monitor the release of the Federal Reserve’s minutes from the December 17-18 meeting on Wednesday, which might offer insights into how various policymakers view the impact of Trump’s proposed policies on the economy and how this could influence the outlook for interest rates.
In addition, Fed Governor Lisa Cook, Richmond Fed President Thomas Barkin, Fed Governor Christopher Waller, Philadelphia Fed President Patrick Harker, Kansas City Fed President Jeffrey Schmid, and Fed Governor Michelle Bowman will be making appearances this week.
Today, investors will focus on the U.S. S&P Global Services PMI, which is set to be released in a couple of hours. Economists, on average, forecast that the final December figure will be 58.5, compared to November’s figure of 56.1.
U.S. Factory Orders data will also be released today. Economists forecast this figure to be -0.3% m/m in November, compared to the previous number of +0.2% m/m.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.622%, up +0.59%.

Let's take a little bigger view of the markets over the last year. 
​The SPY emerged as the top dollar gainer in 2024, adding an impressive $113.41 per share to close the year at $586.02 (+23.99%). However, Q4 delivered the most modest gains of the year, with the index advancing just +2.2%. December stood out as one of only three red months in 2024, alongside October and April, tempering what was otherwise a standout year for the ETF.

The QQQ delivered the highest percentage returns in 2024, climbing $109.78 per share to close the year at $511.23 (+27.05%). Unlike the SPY, which struggled in Q4, the tech-heavy index regained momentum, adding an impressive +4.80% for the quarter. December, while relatively flat, managed to close in positive territory, securing an impressive nine months of gains for the year.

​IWM delivered the most modest returns among the major indexes in 2024, rising just $21.41 per share to close the year at $220.95 (+10.73%). Q4 proved turbulent for small caps, marked by new all-time highs followed by an equally sharp sell-off, ultimately eking out a minimal +0.35% quarterly gain. December capped off the year as its worst month, erasing November’s gains with an -8.81% decline.

My bias today is bullish. We may actually get a retrace from the futures which are up strong this morning but the critical support levels from last week certainly seem to be doing their job. 

Trade docket for today contains /NG, MSTR, TSLA, SPY 4DTE, 1HTE's and 0DTE's.

Let's take a look at the new intra-day levels for our 1HTE's and 0DTE's.
/ES: There a couple big, key levels of support/resistance. 6035, which we are pushing up against right now is the first key resistance with 6100 being both a really key resistance both in terms of the mental focus on that nice round number as well as the fact that it goes back one full month as a barrier to future moves higher. 6000 is first support with 5966 following that.

/NQ: 21,747 is first resistance with 21,934 above that. 21,562 is first support with 21,420 following that. 

BTC: Bitcoin is starting to wake up a bit from its range of last week. We just scored our first 1HTE win this morning of $610 profit and I think we should be able to get some more working today. 100,879 is a key resistance with 102,833 following that.  96,729 is the support level I'm watching. 

We had a good week last week with a couple of successful Theta fairys. It's so hard to tell what the I.V. will look like in this shortened week but we should have a few opportunites to get some more working. I'll see you all in our zoom feed shortly!