Sunday Post - Recap & Week Ahead 1/26/2025

NOTE: Free subscribers will continue to receive the weekly Sunday Post, but it will not include the final section with the chart, key levels, and detailed analysis for the upcoming week. Upgrade to a paid subscription to unlock the full Sunday Post and gain exclusive access to subscriber-only daily game plans.

The US equity markets extended their winning streak, with all three major indexes posting gains of approximately 2% for the week. Investor optimism surged as a rally on Thursday pushed the S&P 500 above its previous all-time high set seven weeks ago. However, the Dow Jones and the Nasdaq remained around 1% below the records they set last month. With respect to the ES market, the small downward channel resistance was broken as illustrated in the daily chart below. The market is now approaching the all-time record high and there´s a good chance this could be achieved soon.

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 ES market began the shortened week with a sudden selloff, but the daily 20 MA was not breached leading to a strong rebound to the daily 50 MA. After a period of consolidation around this level, the rally resumed, breaking above the downward channel resistance. The upside momentum continued, achieving the final target for the week on Thursday. The Bullish scenario outlined in the prior Sunday Post analysis played out perfectly. On Friday, the market initially extended its rally, briefly exceeding the final weekly target, but subsequently pulled back, allowing the market to take a breather.

• General Markets and Sectors:

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

  The S&P 500 broke the 6009-resistance level (now support), which aligns with the downward channel resistance, and made a new all-time record high.

  The NDX/Nasdaq broke the small downward channel resistance, then the 21625-resistance level (now support) and moved higher right to the upward channel resistance from the December 2022 low. It is approaching the 22100-resistance level which is around the all-time high.

  The Dow Jones broke above the daily 50 MA/the 43730-resistance level (now support) and moved higher to the 44359-resistance level. Above here is the 45014 resistance, which aligns with the all-time high.

  Small Caps (IWM) broke above the 227-resistance level (now support) and consolidated right below the daily 50 MA, which coincides with the back-test of the upward channel from the October 2023 low.

  The FFTY index defended the daily 50 MA and rallied higher towards the recent highs. It is back inside the upward channel from the August lows.

  The $VIX drifted lower and is now Bearish.

  Crude Oil broke below the $77 support level (now resistance) and moved lower towards the $73 support level. It closed slightly below the daily 200 MA.

  Gold broke above the 2720 resistance (now support) and moved right to the 2787 resistance, which aligns with the all-time high.

  The US 10-Year yield defended the 4.57% support and rebounded slightly higher. If this area fails to hold, then next supports are the daily 50 MA and 4.40% level.

  The USDJPY consolidated above the 155 support/daily 50 MA. If this area holds, next resistance is at 157.75, if not, next support is at the daily 200 MA/152 level.

  Bitcoin briefly made a new all-time high and then sold off to the 101275 support. Currently, basing between this level and the 106175 resistance.

  Semis, SOX has been rangebound since August and rallied to the top of this range, which got rejected. It remains in an upward channel from the October 2022 low.

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

  The Retail sector, XRT broke the 79 level (now support) and moved to the daily 50 MA. It remains in the upward channel from the November 2023 low.

  The Tech sector, XLK has been rangebound since November and broke above the top of this range making a new all-time high but was rejected. It remains in the upward channel from the January 2023 low.

  Transports, IYT moved above the daily 50 MA and remains in the upward channel from the October 2022 low.

  Financials sector, XLF broke above a long-term resistance line and approached the all-time high. It remains inside the upward channel from the October 2023 low.

  The Materials sector, XLB consolidated around the daily 50 MA and failed to close above this MA.

  Industrials, XLI broke above the daily 50 MA and approached the all-time high. It remains in an upward channel from the March 2020 low.

  The Health sector, XLV rallied higher and broke the downtrend line. Need to see follow through and the daily 50 MA must hold.

  Consumer Staples, XLP consolidated this week and remains Bearish in the short term.

  Utilities, XLU consolidated above the daily 50 MA and is quite Bullish.

  The Energy sector, XLE broke below the uptrend line from the October 2020 low and moved lower to the daily 200 MA/50 MA. Note that this market has been rangebound for at least two years (shaded area).

• YEAR-TO-DATE RETURN:

  DJIA Dow Jones +4.5%

  SPX S&P 500 +3.8%

  IXIC Nasdaq +3.3%

  XLI U.S. Industrials Sector: +7.1%

  IYT Dow Jones Transports: +6.7%

  XLE U.S. Energy Sector: +6.6%

  SOX Semiconductor Index: +6.3%

  XLB U.S. Materials Sector: +5.8%

  XLF U.S. Financial Sector: +5.2%

  XLU U.S. Utilities Sector: +5.0%

  XLV U.S. Health Care Sector: +4.9%

  XLK U.S. Technology Sector: +2.9%

  XLY U.S. Consumer Disc Sector: +2.5%

  XRT U.S. Retail Industry: +0.9%

  XLP U.S. Consumer Staples Sector: -0.9%

• Week of 1/27/2025:

  Click link for complete Economic Calendar.

  ---