where do we go from here?

January 04, 2024

Evening traders.

Back in your inbox with another market brief before we head into the weekend.

We have a fairly heavy news day tomorrow so no messing around.

Let’s jump in…

Impact Snapshot Tomorrow

  • Non-Farm Payrolls - 8:30am ET

  • Unemployment Rate - 8:30am ET

  • Average Hourly Earnings - 8:30am ET

  • ISM Services PMI - 10:00am ET

Market Evaluation

Treasury yields rose and tech stocks dipped ahead of Friday’s jobs report as traders try to gauge how soon the Federal Reserve can really start cutting interest rates.

Nasdaq closes lower for a fifth day, its longest losing streak since October 2022. 

It’s always worth paying attention at the heavyweights of tech as the weights they hold on the benchmark can pull the whole thing with them. tumbled after its second downgrade this week.

Mega-cap tech stocks as are under performing to start the year, as overstretched valuations and uncertainty around when the Federal Reserve will begin to cut rates have investors worried that markets have gotten overly optimistic.

The recent performance on Wall Street comes in stark contrast to how the market ended 2023.

The S&P 500 ended last year up more than 24% while enjoying its best weekly win streak going back to 2004.

An impact-heavy economical calendar for tomorrow will be the key focus with the releases of NFP, Unemployment rate and Average hourly earnings at 8:30am followed by ISM services PMI at 10:00am.

Markets Breakdown

Our morning brief we’ve posted in the overnight session over on X here, highlighted the importance of waiting for confirmation of a breakdown.

The market opened and bounced off of our key pivot that we’ve highlighted for a while now which made for a 0.50% move to the upside, targeting the flip zone.

Watch our LIVE coverage of the market here after this move, using our toolkit for confluence to secure a safe entry around our pivots

As we’ve updated, this move had a lot of trapped shorts in play that they had to cover, not necessary new buyers willing to maintain the upside continuation.

Market rejected off of the the pivot of 4761 after failure to maintain activity above and saw a more serious downside continuation with the market eventually closing bellow the key balance area.The thing to note is that the value area is still well within the prior day’s session and there was no gaps left unlike the prior 2 downside days.

Market is anticipating key economical reports which will help start a directional move.

ES

The key areas we’ll be looking moving forward:

  • Upside Levels: 4759/4774/4794

  • Downside Levels: 4709/4689/4670

That’s all we got.

If you find value in these, share our Substack with 2 friends.

We’ll see you on Sunday!

-The QuantVue Team