Daily Commentary: January 21, 2025

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Critical Market Juncture

Posted by Pete Stolcers on January 21
www.oneoption.com

Today we’ll be able to gauge the selling pressure.

PRE-OPEN MARKET COMMENTS TUESDAY – President Trump was inaugurated and he has been busy signing executive orders. It will take time for his policies to take effect and I believe that this could be a “sell the news” event. The market has been in a gradual downward sloping trading channel and economic conditions have been slipping around the globe. Asset Managers are looking ahead and I believe they have been gradually reducing risk even while conditions in the US remain strong.

The economic releases this week are light and the FOMC Statement is a week from tomorrow. There aren’t many major earnings releases this week either.

With a major “window” setting up next week, the action will be light this week. I expect to see some decent movement and Trump will keep everyone off balance.

The market has been able to rally above the 50-day MA and it is up this morning. This move is still consistent with my thesis that resistance is building, but I need to see this move smacked down. The bounce to the current level has come on light volume. A gap reversal today would confirm that sellers are more aggressive. If the market is able to spend time above the 50-day MA and advance from this level, my thesis was wrong. If the market does rally, I will not participate until I have more proof. I am more focused on what I have seen since October than I am on what I’ve seen in the last week.

Support is the 50-day MA and resistance is at $602.50.

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