DOW Friday Closing Price - 41938
SPX Friday Closing Price - 5827
NASDAQ Friday Closing Price - 20847
RUT Friday Closing Price - 2189

The bears were able to generate the first true negative week since April of last year. The DOW generated a sell signal of consequence, the SPX generated a 2nd small sell signal but a short-term indicative failure signal against-the-bulls, the NASDAQ generated a failure signal against-the-bulls, and the RUT generated a 3rd sell signal as well as 3rd failure signal against-the bulls. All indexes closed near the lows of the week, suggesting further downside below last week's lows (DOW at 41877, SPX at 5807, NAZ at 20718 and RUT at 2176) will be seen this week. Most of the selling was seen on Friday after the JOBS report came out. It was substantially higher than expected (256k vs expected 165K) and it brought about this kind of thinking: "A hot December Jobs report has many strategists confident that the Federal Reserve will hold off on further interest rate cuts for now. And some on Wall Street think this report may have even cracked the door open for the Fed to consider rate hikes in 2025".

This coming week there are several reports of consequence, with the most important one occurring on Wednesday, when the CPI (inflation) number comes out. It is expected to be .2% (last month it was .3%) and if it comes in higher than anticipated, it will generate further selling interest. The PPI number is due out on Tuesday, the Retail Sales number on Thursday and the Housing Starts number on Friday. In addition to these economic numbers, the earnings report quarter gets started on Wednesday and then on Thursday with the financial companies (such as C, JPM and GS) reporting.

In exactly 7 "trading" days from today, Trump will take office and it is highly likely that from day one, he will institute/do many of the things he has promised to do and that will give the traders tangible information as to what to expect over the next couple of months.

I believe that the only report that could have any kind of an impact this week is the CPI report on Wednesday. Earnings and Retail Sales are likely to be better than expected but those are not likely to be catalytic. Then again, if they do come in higher (more probable than not), it will feed the idea that the economy continues to be strong and that interest rates do not have to be cut any further. As such, there is more of a chance of those reports helping the bears than the bulls, but only on a 1-week basis.

Chart-wise, there are some indicative levels this week that if broken, would give the bears additional ammunition. Then again, so much revolves around the Trump presidency that even if these indicative levels get broken this week, they will require confirmation the following Friday before they can be depended on.

Here are the levels to watch this week. To the downside and on an intraweek basis, the DOW has short-term pivotal support at 41647. That level is 291 points below Friday's close, and if broken, it would make the 200-day MA (currently at 40928) into a clear objective. To the upside, a daily close above 42392 would take away the ammunition gained by the bears this week. In the SPX and to the downside, the 5674 level is the short-term intraweek area that if broken, would make the 200-day MA (currently at 5572) into the target/objective. Nonetheless, it is highly unlikely that level will be in play this week. The level that is in play is the island gap at 5783. Which if closed would take away ammunition of consequence away from the bulls. That is 44 points below Friday's close. To the upside, a daily close above 5862 would take ammunition away from the bulls.

In the NASDAQ and to the downside and on an intraweek basis, the 20315 level (324 points below Friday's close) is short-term pivotal, which if broken would open the door for a drop down to the 200-day MA (currently at 19538). This index has been the strong one of late and that is not likely to change this week. The index also has a gap down at 20249, which is a bit of a magnet this week. If that magnet is "on", it would suggest the index would be the weakest of all this week. To the upside, a daily close above 21106 would take ammunition away from the bears.

The RUT does have a relatively important week this week. It has been the weakest over the past 4 weeks but the index is very close to the 200-day MA, which is currently at 2166 (21 points below Friday's close). It is unlikely that line will be broken this week (on a daily closing basis) as it would be an indicative and dependable sign that the overall market is heading lower. I do not believe that can happen this week (not until Trump takes office). As such, the index has a chance of being the strongest of the indexes this week (change of the recent trend). Then again, it is not likely to be "real and lasting" strength as a daily close above 2282 is needed for that to happen.

A good portion of what will happen this week will come on Wednesday after the CPI inflation report comes out. As such, on Monday and Tuesday, weakness should be seen as what happened on Friday will not be negated in the first 2 days of the week and what happened on Friday did generate breaks of consequence. By the same token, it is likely that the bulls will at least "attempt" to negate on Monday morning, the breaks that occurred on Friday, meaning that a rally could be see in the morning hours. Having said all of the above, the probabilities this week favor the bears but only as far as the chart targets mentioned above. This continues to depend on what "Trump does in his first few days on the job and how that will be interpreted by the traders".

HSI Index broke a short-term indicative intraweek support at 19054 (19226 on a weekly closing basis) and closed on the low of the week, suggesting further downside below last week's low at 19016 will be seen this week. The action seen has taken away all the edge/control that the bulls had prior to Trump winning the election. The Tariffs that Trump says he will impose on China have prevented the bulls from being able to even defend the 25% appreciation in price seen between July and September of last year. The index has now fallen 16.2% from the September high weekly close and further downside is expected to be seen this week. The next level of intraweek support is found at 18829 (235 points below Friday's close). Below that level, there is intraweek support at 18417 and then decent to perhaps strong at 18044. The latter is likely to be the "worst case scenario" but with a weekly close at 18229. This does suggest that there is not likely to be more than a 1000 point drop (from Friday's close) even if Trump does raise tariffs at least 30% on China. Most of that has already been factored in. By the same token and because that is not yet clear (what Trump is going to do), it is not likely that there will be much of a rally (if at all) this week. A confirmed daily close above 19116 would take some ammunition away from the bears.

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GOLD(Feb 2025 chart) generated a new 4-week intraweek and weekly closing high and closed near the high of the week, suggesting further upside above last week's high at $2735 will be seen this week. Nonetheless, the bulls were unable to achieve any tangible change as Gold has now been in a 2-month trading range between $2593 and $2756 (based on a daily close). On a weekly closing basis, short-term resistance is found at $2724 and given that Gold closed on Friday at $2715, no break of any resistance occurred. The inflation number this week could be a catalyst but then again, a higher inflation number would suggest the Fed will start thinking about raising rates and that would offset itself. At this time and with the fundamental information in place, it is unlikely that a breakout or a breakdown will occur. This does suggest that a red weekly close will occur next Friday and that Gold will continue to trade in the sideways trading range it has been in for the past 2 months. Having said that, the bulls do have the "edge" right now and an intraweek rally above $2743 would give them a bit of new ammunition. Any red daily close right now (below $2756) would suggest a drop back to $2687 would be seen.

OIL made a new 12-week high and closed near the high of the week, suggesting further upside above last week's high at 77.86 will be seen this week. This rally has been all about the short-term demand being higher than the available supply. The bulls did generate a buy signal of some consequence as Oil closed above the 13-weekly closing high at 75.56 but not above the 21-week high at 76.85 (closed at 76.57 on Friday). The action seen does mean that for the short-term the bears have lost the edge they have had over the past 5+ months but the bulls have not yet gained the edge that guarantees higher prices. It does seem that further positive fundamental news is required to generate the kind of buying needed to take Oil up to the next resistance area of consequence up at $82. Supply and demand information comes out on Wednesday, suggesting that until then, Oil will trade within a small trading range between 74.07 and 77.82 (based on daily closes). A daily close above or below those two levels will given the bulls or the bears the edge for further upside or downside of $4.

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