Seasonal Context & Events
The next earnings season is just around the corner—so close it feels like we barely left the last one behind. This week straddles the end of the month and the quarter, which means the usual portfolio rebalancing from retailers and maybe even the professionals. Inflows and outflows tied to the calendar could add a bit of noise to the mix. Markets will take a break on January 1st for New Year’s Day, but as for options expirations? None this week, so let’s not even think about that one.
Key events include:
2nd January at 13:30 UTC Initial Jobless Claims
Those events may or may not influence the opening direction and subsequent days.
Thermometer
Breadth
| Date | Ratio |
| 23/12/24 | 0.55 |
| 24/12/24 | 0.90 |
| 26/12/24 | 0.55 |
| 27/12/24 | 0.09 |
Rose as expected to recover last week’s panic, but then it stalled—setting the stage for another wave of selling. With Friday, we are already at the bottom.
Put/Call Ratio
| OI | VO |
| 2.24 | 0.92 |
| 1.93 | 1.06 |
Bearish readings, Volume does not agree.
Coherence
| SP500 | +0.53% |
| RUT | +0.25% |
| DJT | +0.99% |
Coherent, moving but doesn’t know where.
Support & Resistance Levels
| R3 | 6063 |
| R2 | 6015 |
| R1 | 5993 |
| Close | 5970 |
| S1 | 5870 |
| S2 | 5828 |
| S3 | 5806 |
Wrap Up & Forecast
I made a slight tweak to the Breadth table on the page. Why? Instead of a static snapshot, I’d rather see where it’s been and where it’s headed. Nothing dramatic, just a small upgrade. Now it feels more like watching the movie unfold rather than staring at the poster outside the cinema.
As expected, the market followed a similar script to its late-October behavior. So why no gap up this time? The answer’s simple: no strong catalyst. Back in November, the Presidential elections provided the spark, but last week? The market just didn’t have the fuel to make a move above the resistance at the apex of that flag, pennant, knot of resistance, formation, or whatever you want to call it, Market doesn’t care how you call it. Remember the closing words from last week’s article: ‘Maybe and not.’ That pretty much sums it up.
What’s next? As usual, we’re looking for up, down, or sideways—it could do any of those, naturally.
So, the Market rose and hit resistance at the apex of that thingy, only to retrace during Friday’s session and find support near the previous week’s close around 5930$. That “long wick” left by Friday’s close makes me think buyers stepped in at that level (it had to, really—how many candlesticks do you see without wicks?). But let’s be real—it’s likely shaping up for a choppy ride downward. The seasonal context and metrics aren’t exactly screaming for a rally to the upside. With the end of the year, end of the quarter, and earnings season still a few weeks away (when the Big Banks and Financials take the stage in mid-January), I’m leaning toward more downside. The question is—down to where?
The high from November 5th close by the S3 looks like a solid support level, putting us around 5783$. That’s just my “logical” side talking, trying to pinpoint targets and levels—which, let’s face it, is kind of hilarious. Rational thinking in something as irrational as the Market? Who am I kidding? Clearly, I’ve lost my mind. Best to let the Market do its thing and just follow along.
Did some artistic changes to the chart as well.
