SPY reversal danger

Monica Kingsley Monicakingsley

I hope you had great New Year‘s Eve celebrations, and once again Happy New Year! S&P 500 was again rejected at 4,840, and started slowly losing altitude into Chicago PMI, which ushered in selling wave as the figure (46.9 vs. 50.1 expected) didn‘t really boost the ruling soft landing narrative in a heavily optimistic market.

Let‘s bring up the premium daily analysis published on my site, which I‘ll put into fresh light following Friday‘s close:

(…) It‘s the Santa rally after all, yet S&P 500 is having issues extending gains much above 4,830s. Blame the year end positioning and unwillingness to deploy big institutional money this late in the year. There probably is still some tax loss harvesting (some may lock in gains) to be done today, and if that happens in the best runners of the year (SMH, NDX, even ES), once these get (re)bought into Jan 02, this may affect them most of the way into Tue Jan 09. Things would work similarly to a springboard, reversing last trading day‘s moves to a degree on Tuesday.

As regards Russell 2000, the fuse was lit only late Oct, so this effect would be less pronounced, and institutions have been shorting it as much as biotech or real estate probably (that commercial real estate crisis that didn‘t come still, regional banks situation papered over successfully in Mar, or dramatically improving liquidity ever since late Oct with all the increasing rate cut bets and soft landing hopes returning as per my early Nov call).

Source: stockcharts.com

Today‘s analysis is shorter than intended, shorter than usual, as I‘m slowly getting better following the quick bout of weakness and feeling cold as of Friday, which requires more a single weekend to get rid of in full. Thank you for your understanding and Happy New Year!

Author

Monica Kingsley

Monicakingsley

Monica Kingsley is a trader and financial analyst serving countless investors and traders since Feb 2020.

EUR/USD off highs, back to around 1.1900

EUR/USD keeps its strong bid bias in place despite recedeing to the 1.1900 zone following earlier peaks north of 1.1900 the figure on Monday. The US Dollar remains under pressure, as traders stay on the sidelines ahead of Wednesday’s key January jobs report, leaving the pair room to extend its upward trend for now.

GBP/USD hits three-day peaks, targets 1.3700

GBP/USD is clocking decent gains at the start of the week, advancing to three-day highs near 1.3670 and building on Friday’s solid performance. The better tone in the British Pound comes on the back of the intense sekk-off in the Greenback and despite re-emerging signs of a fresh government crisis in the UK.

Gold picks up pace, retargets $5,100

Gold gathers fresh steam, challenging daily highs en route to the $5,100 mark per troy ounce in the latter part of Monday’s session. The precious metal finds support from fresh signs of continued buying by the PBoC, while expectations that the Fed could lean more dovish also collaborate with the uptick.

Crypto Today: Bitcoin steadies around $70,000, Ethereum and XRP remain under pressure

Bitcoin hovers around $70,000, up near 15% from last week's low of $60,000 despite low retail demand. Ethereum delicately holds $2,000 support as weak technicals weigh amid declining futures Open Interest. XRP seeks support above $1.40 after facing rejection at $1.54 during the previous week's sharp rebound.

Japanese PM Takaichi nabs unprecedented victory – US data eyed this week

I do not think I would be exaggerating to say that Japanese Prime Minister Sanae Takaichi’s snap general election gamble paid off over the weekend – and then some. This secured the Liberal Democratic Party (LDP) an unprecedented mandate just three months into her tenure.

Ripple exposed to volatility amid low retail interest, modest fund inflows

Ripple (XRP) is extending its intraday decline to around $1.40 at the time of writing on Monday amid growing pressure from the retail market and risk-off sentiment that continues to keep investors on the sidelines.