Sunday Post - Recap & Week Ahead 12/29/2024

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The final full trading week of 2024 produced moderate gains across major US stock indexes. Despite a quiet start, the week saw notable activity driven by large-cap growth stocks, which initially boosted broader indexes before a midweek reversal trimmed gains. Trading volumes were subdued due to the holiday-shortened week. The S&P 500 was up 0.7%, the Dow Jones gained 0.4% and the Nasdaq advanced 0.8% for the week.

Early in the week, the ES market reclaimed the daily 50 MA and rallied to the back-test zone of the triangle pattern, as shown in the daily chart below. However, this level was rejected, leading to another sell-off. Despite this, the market managed to close right at the daily 50 MA. Currently, the market is positioned between the 50 MA, serving as support, and the overhead resistance at the back-test zone of the triangle pattern. These key levels will likely dictate the market's next move.

As usual, I will do a brief recap of this week´s market action, followed by an analysis of the general markets and the various sectors, and conclude with an outlook for the upcoming week.

• Recap:

  The upside scenario outlined in last week´s Sunday Post played out perfectly, with nearly all the upside targets being achieved. The ES market started the week defending the 5973 level, which was critical for the upside move according to the plan. It then reclaimed the daily 50 MA, another requirement for the upside scenario. On Tuesday, the market rallied higher and back-tested the triangle pattern, as illustrated in the daily chart above. The market reached its second-to-last target, which coincided with the back-test zone of the triangle pattern (also daily 20 MA). In Thursday’s update post, I cautioned that the market might sell off due to this overhead resistance, and that is exactly what happened on Friday. However, the market managed to close right at the daily 50 MA after briefly breaking below it. As a result of this week’s price action, the market has entered a 4-Day Balance phase.

• General Markets and Sectors:

  Check out the updated Charts Page which goes with this section.

  The S&P 500 rallied and broke above the 6009 resistance but then sold off with the daily 50 MA acting as support.

  The NDX/Nasdaq also rallied and broke above the 21625 resistance but sold off on Friday. The daily 50 MA and 21171 are supports.

  The Dow Jones rallied to the 43276 resistance which was rejected and sold off to the 42700 support which was defended. This zone aligns with the upward channel support from the October 2023 low. Next resistances are at the daily 50 MA and 43730.

  Small Caps (IWM) consolidated right below the upward channel from the October 2023 low. Next support is at the daily 200 MA and next resistance is at 227 which coincides with the back-test of the upward channel.

  The FFTY index consolidated above the daily 50 MA and remains in the upward channel from the August lows.

  The $VIX sold off further towards the recent lows. It has now turned back to being Bearish.

  Crude Oil consolidated at the daily 50 MA and the long-term support line. As long as this holds, next resistance is at $73, which aligns with the downward channel resistance from the March 2022 high. Support is at $67 which has been holding strongly since September.

  Gold continues to consolidate between the 2720 resistance and the 2605 support. Immediate resistance is at 2672/daily 50 MA and next support is at 2525.

  The US 10-Year yield broke above the 4.57% resistance (now support). Next resistance is at 4.75% which coincides with the April high.

  The USDJPY consolidated at the 157.75 resistance. If broken, next resistance is at 160.

  Bitcoin consolidated right above the 94375 support and closed below the daily 50 MA. Next resistance is at 101275 and next support is at 87300.

  Semis, SOX has been rangebound since August and is currently trading above the daily 200 MA/50 MA. It remains in an upward channel from the October 2022 low.

  Consumer Disc, XLY consolidated this week and remains in a steep upward channel from the August low.

  The Retail sector, XRT consolidated above the daily 50 MA and remains in an upward channel from the November 2023 low.

  The Tech sector, XLK consolidated above the daily 50 MA and remains in the upward channel from the January 2023 low.

  Transports, IYT consolidated above the daily 200 MA and remains in the upward channel from the October 2022 low.

  Financials sector, XLF bounced off the upward channel support from the October 2023 low and moved to the daily 50 MA.

  The Materials sector, XLB consolidated above the upward channel support from the October 2022 low.

  Industrials, XLI consolidated at the August high, which is acting as support for now. It remains in an upward channel from the March 2020 low.

  The Health sector, XLV is in a strong support area which got defended. It is in a downtrend for the short term.

  Consumer Staples, XLP sold off and broke below the daily 200 MA but was then reclaimed.

  Utilities, XLU consolidated above the daily 200 MA, which is also a strong support area.

  The Energy sector, XLE defended the September lows and consolidated above a strong support zone. Note the daily 50 MA crossing below the 200 MA.

• YEAR-TO-DATE RETURN:

  IXIC Nasdaq +31.4%

  SPX S&P 500 +25.2%

  DJIA Dow Jones +14.1%

  XLF U.S. Financial Sector: +31.7%

  XLY U.S. Consumer Disc Sector: +29.5%

  SOX Semiconductor Index: +24.9%

  XLK U.S. Technology Sector: +24.2%

  XLU U.S. Utilities Sector: +23.9%

  XLI U.S. Industrials Sector: +18.6%

  XRT U.S. Retail Industry: +13.5%

  XLP U.S. Consumer Staples Sector: +13.2%

  IYT Dow Jones Transports: +5.1%

  XLE U.S. Energy Sector: +4.2%

  XLV U.S. Health Care Sector: +3.5%

  XLB U.S. Materials Sector: +1.1%

• Week of 12/30/2024:

  Click link for complete Economic Calendar.

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