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01/05/2024 |

Market Update Into January 8th: A Red Start To The Year

The new year is here, and with it, the first red week in over two months for the SPY and QQQ! Why the change of pace? Many are pointing to the dollar index, which has an inverse relationship to stocks. The DXY caught a bid and in turn, stocks sold off. On top of that, more bad news came for the market bellwether, AAPL, which received two analyst downgrades and a potential anti-trust case this week. In other news, Cramer got bullish on Bitcoin (a terrible sign for crypto bulls), the 10-year rallied, jobs numbers came in hot, unemployment came in lower than expected, and Nancy Pelosi managed to outperform every major hedge fund in the world last year! Let’s dig into the charts!

Weekly Analysis

The strongest performer this week, the SPY ETF, managed to close at $467.96 (-1.56%). Interim support was found at the top of the weekly Fair Value Gap, but with the price now below the top of the rising wedge, a test of the 9-week EMA could be on the horizon.

This is a weekly chart of the SPY index.

Despite putting in fresh all-time highs last week, the QQQ ETF closed sharply lower at $396.77 (-3.12%). Price is now coming into an area of potential support, with the top of the rising wedge, the bottom of the weekly Fair Value Gap, and the 9-week EMA all just below.

This is a weekly chart of the QQQ index.

The IWM was the weakest performer of the group this week, closing at $193.28 (-3.72%). Traders will likely have a close eye on the top of the descending channel, which happens to align nicely with the 9-week EMA and the bottom of the weekly Fair Value Gap.

This is a weekly chart of the IWM index.