January 17, 2024

Markets:

Stock futures were lower Wednesday, putting Wall Street on track to build on the losses from the previous session.

Wall Street is coming off a losing session, as the yield on the 10-year Treasury note marched back above 4% after Federal Reserve Governor Christopher Waller warned easing monetary policy may come slower than anticipated.

On Wednesday, European Central Bank President Christine Lagarde said she expects the ECB to cut rates later this year, but reiterated a data-dependent approach to policy.

So far, traders are pricing in a roughly 60% chance that the Federal Reserve begins cutting rates in March as hopes mount for a pivot, according to CME Group’s FedWatch tool.

Traders also weighed weaker-than-expected China GDP data that were released overnight.

Fourth-quarter earnings gain steam this week and could serve as the next major test for the market that could dictate the setup for 2024. Shares of Charles Schwab fell 0.5% during premarket trading after reporting an earnings beat but revenue miss. US Bancorp also slipped 0.3% after its revenue also came in below expectations.

Portfolio:

We enter the new trading session holding set-ups in AFRM and PLTR. Patience is needed right now and allowing this market to continue to base and provide us the next level opportunity we patiently wait for here. Again, for our technical folks, just take a look at the Nas and the pattern / formation developing there. Right now, 4700 – 4800, is the ping-pong area on the S&P. But, with monster earning reports set to begin next week, we will have our catalyst for movement.  The amount of upside call volume coming in is notable. Especially in growth and tech. This is not retail, but monster lots being purchased. Clear positioning for a move higher and this is undeniable based on the activity taking place beneath the hood. The same activity that led us in 2023 we now begin to see it in early 2024 with similar type of trading patterns. We are only stating this to please be cautious and silence the noise of "pullbacks" etc. you continue to see on certain financial shows. These are the same people that told folks to sell when the S&P was at 3600 in 2023 and calling for further declines and recession. Just stay patient here, the biggest window of opportunity is developing, and earnings season is upon us. The true trend will reveal itself and then we have our monster runway of opportunity. Be ready today! Let's have a great trading session.