Seasonal Context & Events

With just one week to go before earnings season kicks off, the calendar looks pretty uneventful—no holidays, but Market will be closed on the 9th in honor of the former President Jimmy Carter, no options expirations, just a lot of market watching. I’m not one to obsess over events, but it’s worth being aware that the unemployment rate drops on Friday the 10th at 13:30 UTC. Will it “steer” the market? Maybe for a bit, because markets love a good excuse to wobble around. Beyond that, it’s business as usual—boredom mixed with the occasional overreaction.

Key events include:

7th January 15:00UTC JOLTs Job Openings

8th January 19:00 UTC FOMC Minutes

9th Junuary 13:30UTC Initial Jobless Claims

10th January 13:30UTC Unemployment Rate

Those events may or may not influence the opening direction and subsequent days.

Thermometer

Breadth

Date	Ratio
30/12/24	0.06
31/12/24	0.58
02/01/25	0.34
03/01/25	0.78

Tried to escape the bottom, but then turned back down, to violently bounce back up.

Put/Call Ratio

OI	VO
2.01	1.27
1.78	1.57

Still, high readings for a supported and long lasting rally to the up.

Coherence

SP500	+0.35%
RUT	+1.68%
DJT	+0.09%

Coherent and greedy, doesn’t follow along.

Support & Resistance Levels

R3	6124
R2	6106
R1	6093
Close	5942
S1	5772
S2	5753
S3	5747

Wrap Up & Forecast

Funny how the first trading day of the year managed to hammer everyone who jumped in long right at the open, just because it was the start of a new year. Not exactly the dream start, is it? But hey, as Warren Buffett once said, “The stock market is a device for transferring money from the impatient to the patient.” So, if the urge to throw money at the Market is irresistible, maybe just hand it over instead (kidding, of course).

Now, let’s get serious.

What happened? The Market spent the week sliding downward. Does that mean it’s time to dump all your holdings? Obviously not. The previous week’s target was 5783$, lining up with the lower part of the gap-up from November 6th (last year, technically). The lowest point of the week was 5829$—about 50$ off the target, or 0.80%. For an index, that’s quite a (too big) miss. Still, the Market doesn’t even know anyone exists, so taking it personally would be a bit much. Let’s call it room for improvement in forecasting.

Then, on the last day, the Market decided to bounce back up with a nice and strong move to the upside. Honestly, this was expected—just not so soon. The middle of next week seemed like a more fitting timeline. But hey, the Market does what it wants, when it wants, no need to consult anyone.

What’s next? As always, the Market has three options: up, down, or sideways. Is the downtrend over? It seems so. Will it go sideways? Maybe not. So, does that mean up? Perhaps, but how far? Resistance levels, all magically calculated, are way above 6000$, which doesn’t seem likely this week. The range looks more like 5975$-6000$ and with Friday’s close there isn’t much room left. That would place the Market right below the 26th December high and almost aligned with 11th November peak. And after that? Possibly another short leg down. Why? Because. So, the gap will never be closed? Well, maybe in the next round down. What if it rises? Well, to be sure it’s actually rising, maybe it makes sense to wait for the Market to stop making lower highs and lower lows. Just a thought.

Given that the calculated S/R levels are currently far from the price action (a common occurrence during range-bound times), it seemed like the perfect opportunity to add a little something extra to the chart. You’ve already seen the red and green lines (pretty self-explanatory), but now I’ve introduced blue dotted lines. These mark my POI—Points of Interest. Call them whatever you want, but I like to think of them as breadcrumbs for when things start to get interesting.

From a longer-term (year-ly) perspective, the so-called “2025 apocalypse” was a popular call—guilty as charged. However, this is likely to mark the bottom for the entire year. Some corrections are expected around the first two weeks of March (around 200 points, give or take), which could present another solid ‘buy-and-hold’ opportunity. Beyond that, the Market is expected to rise until around mid-July, where a sideways-to-down phase (less than 200 points) might take over, lasting until the final days of August. From there, a rise into September could follow, pausing in the middle of the month before a small correction to close out September. October? Likely another leg up, pushing into mid-November, after which the Market may shift into its classic “I have no idea what to do in December” mode. That mess might just recover during the last two weeks of December because, well, that’s how markets like to end the year—full of surprises.

If still alive—and, more importantly, if memory serves—forecasts will be updated during key months like March, July, and August, or whenever something interesting might happen. Let’s face it, those are the moments worth commenting on.

Oh, and I almost forgot! Since billion-dollar firms keep missing their targets, why shouldn’t I give it a shot too? 7200, by the 31/12/2025. See you in 12 months!

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.

Seasonal Context & Events

Earnings season is officially in the rearview mirror, and we’re heading into the final stretch of the month—and the quarter. That means the usual dance of monthly cash inflows and outflows could start to make itself felt, as funds and portfolios do their end-of-quarter shuffling.

The 24th will see markets open until 18:00 UTC, and then they’ll be closed on the 25th for Christmas. A rare pause in the chaos—enjoy it while it lasts. Oh, and no options expiration this week, so at least one source of drama is off the table. Don’t worry, though—markets will find other ways to keep things interesting.

Key events include:

26th December at 13:30 UTC Initial Jobless Claims

Those events may or may not influence the opening direction and subsequent days.

Thermometer

Breadth

Ratio	0.14
Line	-370
Thrust	0.15

More bearish than bullish I would say.

Put/Call Ratio

OI	VO
1.34	1.48
1.60	1.29

Still, looking down.

Coherence

SP500	-2.19%
RUT	-4.37%
DJT	-4.80%

Coherent, panic, not moving.

Support & Resistance Levels

R3	6128
R2	6015
R1	5993
Close	5930
S1	5886
S2	5827
S3	5783

Wrap Up & Forecast

I’m warning you upfront—this is going to be longer than usual. Did you see that coming? If so, congratulations, you’re already ahead of most market amateurs.

Let me just say this: only non-professionals will proudly declare, “I knew that.” The truth is, whether you’re into technical analysis, fundamental analysis, or just flipping coins, all forecasts are based on current trends, metrics, and projecting past data into the future. That’s how forecasting works. But pretending you could predict a 2.95% drop in less than two hours before the close? That doesn’t make you an expert—it makes you a market amateur.

Big moves like this have happened maybe 10–12 times in the past 50 years. So sure, keep telling yourself you saw it coming. What you likely predicted was the direction, not the sheer magnitude. And that’s fine! But please spare me the “I knew it!” bravado—it’s tiresome, and frankly, you didn’t see anything. The correction aligned with your broader view, sure, but the scale? Entirely out of your league.

I had to get that off my chest because, honestly, the thing I dislike most about markets isn’t the volatility or even the uncertainty—it’s the participants. Yes, I get it: without participants, there wouldn’t be markets. But does it have to be these participants?

A few curiosities for you:

1. I left the red lines on the charts from the gap-up on November 6th for a reason—they’ve proven to be excellent support and resistance levels. Not everything is noise, after all.
2. The Market found support around $5870, which (interestingly) coincides with the calculated Maximum Pain level for options expiring in December. Good news for options writers, but not so much for anyone who expected a predictable market this time of year. Lesson: predictability and December don’t mix.
3. Speaking of that gap-up, here’s a fun stat: the index has made similar moves (gap-ups of that size) 3 times since 1960. The last one? 1984. Here’s the kicker: it never closed. The previous one? Closed after 4 days. Will it hold this time? So far, the answer seems to be yes.

So, there you have it—some food for thought and, hopefully, a bit of perspective. And no, I won’t blame you if you still claim you knew it all along. Just don’t expect me to believe you.

Apart from the panic, what actually happened? A day down and a day up, choppy as per previous forecast (nah I did not expect the magnitude)—that’s all. The market found support at the November 6th gap (right at the middle of it) and bounced right off it. Nothing revolutionary.

Now, let’s talk about one of my favorite market quirks: end-of-year tax-loss selling. Every year, people rush to dump their losers to save a bit on taxes. And honestly, it cracks me up every time. Personally, I can’t wait to pay a massive tax bill—that would mean I crushed it this year. Like Mr. Shoaff urged Jim Rohn to become a “happy taxpayer” (check out 7 Strategies for Wealth & Happiness if you’re curious), I’m proud to say I’m a happy taxpayer too.

What they do with the money? Not my concern. I’ve agreed to live in this society, and paying taxes is part of the deal. If I have a problem with it, I can always move to the jungle and live off the grid. Nobody’s stopping me. As for the classic “The goose that lays the golden eggs eats too much” argument—sure, maybe the goose is overeating, but I’m not here to do politics. I take responsibility for my actions and move on.

Back to the sellers—did they already unload their losers during the panic? Maybe some did. Others might have been waiting for the bounce to make their move. That bounce could fizzle out by the 24th, opening the door for another wave of selling, which might even carry into next week. And after that? Well, then we’ll see. I do notice some repetitive behavior in the chart below, but I won’t draw it this time (or maybe I did draw it). Well, should I have drawn it last week? Maybe I did—and just uploaded the wrong chart. Will happen the same again and with the same magnitude? Maybe and not.