Good evening traders...goodness! I see you partied hard today!
US indices on Monday's close: SPX: (+0.68%), NDX: (+1.23%), Dow: (+0.70%) and RUT: (+1.03%)
ES futures spent much of Monday at 2712/2714 before finally breaking through to 2718 at 13:45. From there it drifted sideways until 15:55 when price spiked up to 2725 before pulling back on GOOG post market earnings volatility to close at 2721. SPX closed at 2724.87. NDX/IXIC/Tech led the action in the run up to tech earnings after the bell. Right now, NQ futures are not really adhering to the notion that the post market Alphabet action is a deal breaker for the FAANG run. If that leadership can continue, NDX seems headed to the 61.8 level and the 200 day. The futures profile yesterday was atypically low volume and quite scattered compared to previous daily profiles and this bears watching in the meantime. The overnight futures profile is an L configuration with most action south of the opening range.
On Monday, SPX closed over its most important retrace level and 100 day average on relatively low volume, NDX has moved through its 100 day average, Dow retested and bounced from the 200 and 100 day averages and closed over its 150 day average. RUT is now above its 50% retracement of the major downtrend and closed just at its very steeply declining 100 day average.
Levels to watch: Things have merged and gravitated a bit since Friday resulting in some subtle changes. SPX 2700 is becoming more centralized and supportive while 2712 is also an area of contention/increased support. This is based on multiple factors including the futures profile, positioning and of course the obvious levels on the chart. In the event of a hiccup, you have futures support at 2675 followed by the week's main support at 2650. Again, we have 2625 as a contingency area of weekly support where there is some serious hedging. The upside targets have changed a bit too. If the market can open over 2725 then the 2018 point of control at 2729 is in play followed by the 200 day moving average and 2743. After that resistance will be found at 2750 and 2760. We might keep in mind that day to day moves are also prone to the whims of some influential people who think themselves very wise. That said, the constant rotation and handoffs from index to index is bullish.
February gold settled at $1318.95/oz or (-0.2%) as it consolidates during slower Chinese demand on the New Year holiday coupled with some USD strength. April gold is $1318.20 or (-0.08%) right now.
Incoming
Coming up at 10:00 ET we have the ISM Non-Manufacturing Index. That is typically a low impact report. Later on this evening we have the State of the Union Address. You really can't miss it. If you are not prepared for that kind of excitement, you can watch the ES futures instead -- but be aware that the low volume overnight session is sometimes more excitable than the regular session.
(20min delay)
