Tariff Decision Punted… And New Ones Added
The S&P closed mostly unchanged on the week up a mere 0.15% yet down 0.62% from the all time high that was set on Monday.
Lots of effort and moving around for not much reward and progress.
The trend remains up, and price is still above the breakout level, however with a lagging Nasdaq, its worth keeping an open mind into this upcoming short week.
* Markets are CLOSED on Monday for Martin Luther King Day.
Tariffs, Tariffs, Tariffs…
The SCOTUS decision expected on Liberation Day IEEPA tariffs was once again punted from January 14th to what might be this Tuesday, January 20th.
Although the delay in decision has caused odds to move slightly higher in the direction of a favorable ruling, its still not even a 50/50 split.
But thats not all, new tariffs were announced this weekend to act as a lever on Greenland.
Denmark, Norway, Sweden, France, Germany, the UK, Netherlands, and Finland will face tariffs of:
- 10% starting on February 1
- 25% starting June 1 if a deal for Greenland isn’t made
Not that this is the most accurate measure in the world, but prediction markets have the odds staggeringly close to 50/50 that there will be some action before the end of Trump’s term.
Generally my take is that we are here to make money… so cast aside any feelings about this endeavor and focus on impacted sectors.
Rare earths.
The names to be watching are: $CRML $MP $UAMY $USAR $UUUU
This group already made a parabolic move in early October when the China export restrictions caused massive interest.
Short term new bases have been formed, and are starting to break out based on the new Greenland catalyst last week.
Of the group my favorite setups are the $CRML inside bars Thursday / Friday and the $USAR flat top base breakout setup over roughly 19. (USAR is listed below in the swing ideas section)
Fundamental Forces
Inflation data from CPI and PPI came in a hair below expectations this week driven by slight decreases in energy costs.
Truflation gauges housing inputs coming down more meaningfully as well over the last four months. Data from Arbor Research confirms.
The CPI diffusion index shows that the percentage of components over 2% YoY has dropped to a meaningful low while components over 4% are almost completely out the door.
Labor beat expectations on the jobless claims numbers for both initial claims and continuing claims.
So although anecdotally we may hear about Meta layoffs, there isn’t widespread concern in the data yet.
As always we’ll let the charts and technicals light the way on top of this fundamental backdrop.
Let’s dig in.
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Broad Market Analysis
SPY – Weekly
Last week printed a small-bodied green doji. A lot of action, but very little progress. Large upper and lower wicks tell the story. Buyers tried to rally, sellers tried to press lower, and neither side won.
The key weekly level remains 689. We are still technically holding above the prior all-time high breakout. Momentum is weak, but the breakout has not failed.
If price fails back below 689, the next level to watch is 686 two week lows. A break there would likely trigger profit-taking seeing that NAAIM is >95.
Even in that scenario, the weekly trend is not broken. A higher low can still form. Ideally 675. That aligns with the weekly 20-SMA and a 50% retracement.
Measured-move upside from the wedge breakout still points toward the low-730s. That is not a timing call, just a structural reference.
SPY – Daily
The weekly expected move is balanced. ~700 marks a new all time high, but 683 marks a lower low.
As long as price holds 689, the daily uptrend remains intact. Brigade Bolts™ over 695.5 unlock blue skies. Below 689, the daily trend threatens a double top neckline under 686.
If the daily trend breaks, the 50 SMA near 679.75 becomes the first target. That would still be a potential weekly higher low.
SPY – Hourly
Wednesday was the bears’ best chance to do serious damage to the 1h trend. They failed to follow through under 689.
There is also an un-repaired overnight all-time high from CPI. Markets tend to want to repair those during RTH.
As long as 689 holds, higher lows can continue to form. That keeps the bull thesis alive. Brigade Bolt™ into ATH is blue sky. If that ends in look above and fail, we’ll have to reassess the supporting evidence before flipping bearish.
A loss of 689 and daily 20 SMA changes the tone quickly. Lower highs and downside continuation below the 686 becomes a higher probability. Any bounces from lows at 679.75 should be respected as a possible daily trend reversal seeking lower highs on the retest of 686.
Market Internals – NYSE
Internals match the weekly doji. Neutral.
Volume flows show no real distribution. Sellers have not shown urgency.
Advance-decline spent most of the week positive. Friday leaned bearish, but only briefly. Intraday index score is red as most days had some kind of morning fade.
Cumulative ticks are slightly positive overall. Nothing here confirms a large bearish divergence under the hood.
Market Profile
Weekly value is nearly unchanged signaling balance.
Notably, Friday single prints failed to reach key downside reference levels like Wednesday PoC. Downside conviction remains weak.
XLK – Caught in the crossfire
The technology sector is caught between semiconductors (SMH) rallying on the heels of TSM earnings last Thursday, but an absolute washout in software stocks (IGV).
This push pull is making it decidedly difficult for the broad market to resolve higher with momentum in the S&P and the main reason for the lag in the Nasdaq 100.
If you want the full take, including all of the nuance of breadth, risk appetite and much, much more, check out the weekend episode here:
Economic & Earnings Calendar
This week really just boils down to more inflation data on the docket from PCE prices. Very likely markets are more interested in the tariff headlines.
Top watches: $NFLX, $INTC, $ISRG, $AA
Swing Stock Scans
BROS – Daily
Cleared the daily double bottom neckline now coasting on top. Ideally a break over the moving average stack gets it up and out, headed towards the 72.20 origin of the breakdown level. Note also SBUX is breaking out of its base.
IBM – Daily
Lets see if Watson can break this range sooner rather than later. Great relative strength going sideways in this flag ever since the prior earnings cycle move. Pretty tame pullbacks, and riding over the daily 200 with cushion.
MCHP – Daily / Weekly
Small triangle after multiple gap and gos. Looking to see if the three bar play on the weekly chart can get up and out of 76 for the push into 82.75. Slightly extended from the 50 SMA but worth keeping an eye on. Gap fill reversal off of 68s could also set higher lows.
NNE – Daily
Early looks for an inverted head and shoulders. Could set something up for a move over 39 in the near term future. Interesting to watch mainly due to it being a part of the nuclear sector.
SERV – Daily
This setup may need some more time, but robotics continue to be a hot theme. If this flag can stay over the prior double bottom neckline, there is potential for the swing highs and beyond. Not the best Friday bar. Letting it brew.
TOL – Daily
Strong wedge as home builders outperform in recent weeks. XHB has made a new swing high. If this can break over 94.25, not bad into blue sky territory. In play so long as higher lows keep forming.
USAR – Daily
Double bottom base forming with the potential to breakout on the Greenland news / tensions mentioned above. Unfilled gap target around 24 and then the equal lows from the blow off top at 25.25.