Market analysis for Jan. 8th, 2024

Welcome back traders! Well...yesterday reminded me on Queen Elizabeths, Annus Horribilis statement. I was looking for a more neutral day yesterday and that was certainly NOT the case. The current word of the day (week/year...maybe?) is "Tariff(s)". Most (myself included) thought they were just a bluff and bargining tool for Pres. elect Trump. Well...doesn't look like it. The market is bracing for them to show up the first day of taking office. It put my /ES and NDX trades deep in the hole. Down about -$8,960 on my /ES and -$12,226 on NDX. so I've got some work to do in the next 8 days which is where my adjustments take me. Scalping worked well and we had one 1HTE that just missed that wiped out about $1,400 of gains. Ah...such was the day. Today is a new start. Let's see if we can get some green today. Here's an overview of my day yesterday. 

We may be able to get a take profit on our TSLA roll today which would be a step in the right direction.
Let's take a look at the changes in the marketplace. Probably not a surprise that technicals are now firmly bearish.

As bad as yesterday felt, in the moment, we are still stuck inside a large consolidation zone. 
It would just be guessing at this point to try to determine a directional bias. If we broke the support lines drawn on the charts that would get me onboard the "bearish train" but right now is just a lot of churn. Intra-day it feels big but big picture not much is happening.

March S&P 500 E-Mini futures (ESH25) are trending down -0.27% this morning as investors weighed concerns over U.S. tariffs while awaiting the Federal Reserve’s December meeting minutes, comments from a Fed official, and a fresh batch of U.S. economic data.
S&P 500 futures reversed early gains and turned lower after CNN reported that President-elect Donald Trump is contemplating declaring a national economic emergency to provide legal justification for a large swath of universal tariffs on allies and adversaries.
In yesterday’s trading session, Wall Street’s main stock indexes closed lower. Palantir Technologies (PLTR) slumped over -7% and was the top percentage loser on the S&P 500 after Cathie Wood’s ARK Invest ETFs sold $15 million worth of the stock on Monday. Also, MicroStrategy (MSTR) plunged nearly -10% and was the top percentage loser on the Nasdaq 100 after the price of Bitcoin dropped more than -5%. In addition, Tesla (TSLA) slid over -4% after BofA downgraded the stock to Neutral from Buy. On the bullish side, Moderna (MRNA) surged more than +11% and was the top percentage gainer on the S&P 500 as vaccine makers rallied amid a rising spate of flu and COVID-19 cases across the U.S. 
A Labor Department report released on Tuesday showed that the U.S. JOLTs job openings unexpectedly rose to a 6-month high of 8.098M in November, stronger than expectations of 7.730M. Also, the U.S. ISM services PMI advanced to 54.1 in December, beating the 53.5 consensus. In addition, the U.S. November trade deficit widened to -$78.20B from -$73.60B in October (revised from -$73.80B), though it was smaller than the expected deficit of -$78.30B.
Richmond Fed President Thomas Barkin said on Tuesday that the central bank is “highly committed” to a 2% inflation target, and should price pressures persist, the Fed will need to adopt a tougher stance on interest rates. Also, Atlanta Fed President Raphael Bostic stated in a podcast recorded on December 9th and released Tuesday that policymakers should proceed carefully due to uneven progress in reducing inflation.
“The Fed will likely switch from cutting interest rates at every decision, as they did between September and December, to pausing in between rate cuts in 2025,” said Bill Adams at Comerica Bank.
U.S. rate futures have priced in a 95.2% probability of no rate change and a 4.8% chance of a 25 basis point rate cut at the conclusion of the Fed’s January 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.
Today, market watchers will closely monitor the publication of the Federal Reserve’s minutes from the December 17-18 meeting. The report will provide additional insight into officials’ perspectives on the paths of the economy, interest rates, and inflation in the coming years.
On the economic data front, all eyes are focused on the U.S. ADP Nonfarm Employment Change data, which is set to be released in a couple of hours. Economists, on average, forecast that the December ADP Nonfarm Employment Change will stand at 139K, compared to the November figure of 146K.
Investors will also focus on U.S. Initial Jobless Claims data. Economists expect this figure to be 214K, compared to last week’s number of 211K.
U.S. Consumer Credit data will be reported today. Economists foresee this figure to stand at $10.30B in November, compared to the previous figure of $19.24B.
U.S. Crude Oil Inventories data will be released today as well. Economists estimate this figure to be -1.800M, compared to last week’s value of -1.178M.
In addition, market participants will be looking toward a speech from Fed Governor Christopher Waller.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.679%, down -0.13%.

My lean or bias yesterday of neutral was just a tad (or a lot!) off. We have FOMC minutes out today. I don't expect a big shock with that but you never know. I have to stick with neutral bias again today. Until we get a break one direction or the other its just guessing here. 

Trade docket today, and probably for the next 8 days will be focused on our /ES and NDX trades. We need to cashflow them every day to recover our debits from yesterday. Scalping continues to present some nice opportunities and we may benefit again today from that.

​Spread between S&P 500’s forward earnings yield and 10y Treasury yield has reached new 23-year low. I've traded for near 40 years now. I don't remember ever seeing this.

Volume continues to dry up. It certainly looks like the bulls are running out of gas here.

Another potential warning sign. All of 2024, the percentage of S&P 500 stocks trading above their 200-day SMA remained in a very predictable range. Last month, we broke that range to the downside.

Let's take a look at the intra-day levels for our 0DTE's.
​/ES: 5977 is new resistance now with 6021 following. 5925 is new support with 5889 next.

/NQ: with all the movement yesterday our levels haven't changed. 21,564 is still resistance and 21,222, while close, remains a support level.

BTC: Bitcoin got whacked yesterday along with equities. It's amazing how correlated it is. We haven't had an opportunity to get a BTC swing trade working yet. We may be getting into that buy range soon. 98,226 is first resistance with 101,040 next. 94,203 is first support with 92,448 next.  It currently looks a bit tough to get a 1HTE working but we'll continue to monitor it as the day progresses.

See you all in zoom shortly. Let's set an audacious goal of getting some green today...as hard as they may seem after yesterday.