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Morning Market Rap 01/26/22 by CTG

SPY / QQQ / Vix

SPY 5 days, hourly candles (and 4hr candles) S&P futures starting to peek over Monday's bounce highs, in search of the hourly and 4hr trend change back to bulls.

Yesterdays hourly "higher low" compared to Monday's low was tested/held in after hours post-MSFT earnings reaction 429.20 the after hours low before futures opened

441.30 the corresponding futures high

SPY 3 months, daily candles Daily inside bar day yesterday within Monday's massive range; bulls looking to break that bullish if they can get over/stay over yesterdays/Mondays highs with a confirmed hourly/4hr trend change. Daily RSI is still in oversold territory. Expect massive ranges and big moves, both directions. Powell at 2et with presser at 2:30et will only fuel more volatility.

439.72-440.38 the highs from Mon/Tues - trading a bit above there now for the gap up open set up

442.09 200 day MA overhead

448.06 next resistance

450.20 the 150 day MA

427.15 the low from yesterday and first support on this timeframe

420.76 Monday's low after that

QQQ 5 days, hourly candles Nasdaq futures with a similar look and peeking over yesterdays highs, but still a tad under Monday's bounce highs as it looks for the hourly/4hr trend change back to bulls - Though the hourly "higher low" was broken after hours yesterday, post the initial MSFT earnings reaction, so there's an asterisk there. Technically still needs to find a new hourly "higher low" anywhere above there. 338.65 the after hours low

352.60 the corresponding futures high

QQQ 3 months, daily candles Inside bar day here as well, inside Monday's massive range. Daily RSI still in oversold territory. Bulls hoping to break the highs of yesterday/Monday first thing, to get the daily oversold bounce underway. Any bounce that tops out under the 355-357ish area still has to be considered a possible daily bear flag. 351.03 the high from yesterday, trading a tad above there for the gap up open set up

353.98 the bounce high from Monday as next resistance

362.18 after that

365.70 the 200 day MA 341.68 the low from yesterday and first support

334.15 low from Monday after that

IWM 3 months, daily candles Small caps also trying to get over their highs set yesterday/Monday/Friday, and see a bigger bounce off daily oversold conditions, which are now peeking out of that condition. The bigger the bounce, the more room bulls have to try and set a daily "higher low" anywhere above Monday's lows whenever the oversold bounce tops out. 201.70 the high from yesterday, trading just above there currently

202.39-203.02 after that

207.03 the daily 12ema

208.99-209.46 area after that 194.56 the low from yesterday and first support

191.23 Monday's low after that

Feb Vix futures 3 months, daily candles Finally backing off this massive vol move, under yesterdays lows currently, and heading for the test of Mondays lows that were hit after the big oversold relief bounce

Spot Vix 3 months, daily candles Monday's move paused just under the 40 area.

Yesterday we got back under 30 and seeing some more downside follow thru today with 28.14 the low so far.

A vix above 20-25 is still very high, and massive intraday ranges and moves should be expected.

Unless Powell really surprises the market, we should see some more of that vol premium deflated post-FOMC S&P futures vs fair value: +65.70. Nasdaq futures vs fair value: +256.00.

The S&P 500 futures trade 66 points, or 1.5%, above fair value as buyers follow through on yesterday's rebound effort in front of the FOMC policy decision this afternoon. Corporate news, including earnings, have provided an added measure of support.

The FOMC policy statement will be released at 2:00 p.m. ET, and Fed Chair Powell will host a press conference at 2:30 p.m. ET. No change to policy is expected, but the Fed is expected to signal an intention to conclude asset purchases and begin hiking rates in March to rein in inflation.

There is hope that Fed Chair Powell will sound less hawkish than feared regarding the path of rate hikes this year, as well as any commentary on plans for reducing the balance sheet.

In corporate news, most companies since yesterday's close topped EPS estimates, including Microsoft (MSFT 299.00, +10.51, +3.6%), Texas Instruments (TXN 181.75, +7.79, +4.5%), and AT&T (T 26.93, +0.45, +1.7%). Apple (AAPL 163.14, +3.36, +2.1%) is up nicely amid a report from Bloomberg indicating that the iPhone was the top-selling smartphone in China in Q4 of 2021 for the first time since 2015.

Separately, Ukraine continues to downplay concerns of a Russian attack, urging everyone to "stay calm," although the U.S. is warning that an attack could be imminent, according to The New York Times. The market is receiving mixed signals on this front and will continue to monitor the situation.

The Treasury market is seeing modest selling pressure amid the positive bias in the futures market. The 2-yr yield is up two basis points to 1.04%, and the 10-yr yield is up one basis point to 1.79%. The U.S. Dollar Index is up 0.1% to 96.06. WTI crude futures are up 0.9% to $96.39/bbl.

On the data front, investors will receive the Advance International Trade in Goods, Retail Inventories, and Wholesale Inventories reports for December at 8:30 a.m. ET, followed by New Home Sales for December ( consensus 765,000) at 10:00 a.m. ET. S&P futures vs fair value: +81.00. Nasdaq futures vs fair value: +329.80.

The S&P 500 futures are up 81 points and trade 1.9% above fair value.

The Advance report for International Trade in Goods for December showed a deficit of $101.0 billion, versus a revised $98.0 billion (from $97.8 billion) in November. The Advance report for Retail Inventories for December rose 4.4%, while the Advance report for Wholesale Inventories for December rose 2.1%. All eyes on Powell 2et/presser 2:30et

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