Charting Blog - Jan 23, 2022

This is a charting blog, with Daily and Weekly charts of SPX, NDX, RUT and DAX.


Rough week for Stock Market Indices, and let's see CHARTS first - then in second part - what comes next out of data, in the following week.


1) CHARTS



SPX Daily


Zooming in on a Daily chart. Selloff on Friday pushed price below DMA200, and also showed that market participants were NOT willing to hold longs into the weekend. That's an info on its own. IF downside continues, first target would be October lows, around 4,300.


MORNING NOTES for Friday, Jan 21, 2022:

"Additional thing to consider is – in case of another down day in the US markets – who is going to hold the longs over weekend? That could lead to another “selling into the close”, like it was Yesterday."


SPX Weekly



Weekly chart - we can observe the usual false breaks over previous ATHs, and to have in mind that markets OFTEN makes swing lows as springs below previous support levels.

It doesn't pay to GUESS the bottom, but rather to wait for the bullish setup, and to stay with sellers as long as markets are weak. If you can't sell rips, sit on your hands.



NDX 2-Day chart


To fit all I want on this chart, I used the unusual option, with 2-day candles.


("But StrayDog, you could just use Weekly... " - I know, and YOU take a look on the Weekly on your own)


As written in M. NOTES - better Supports IMO on SPX and NDX are 4,300 and 14,500.

Nasdaq already hit that on Friday, and now is 14% away from ATH.


IF ->THEN

IF Friday lows do not hold - so, no spring / reversal... In the case of SPX - no reversal back above DMA200 and in case of NASDAQ - no hold and bounce from 14,500; THEN more can come, and lower Supports are marked.

Let's see RUT as well.



RUT Weekly chart


Areas where market moves FAST, are the ones where Supports or Resistances are weak, simply market didn't spent enough TIME to make usable S/R references, and when they turn in the opposite direction, they can fill those areas relatively quickly. Now, a 11-month of Supply is above. And already -19%, which means RUT can "flirt with Bear Market territory" starting from Monday. Nothing Bullish here as well.


Let's go to German DAX, which was showing relative strength to US markets, but CAN NOT go higher without them. That happened only once in the last decade, when Mario Draghi used bazooka. Also, didn't last for long.


DAX CASH Daily

Cash closed basically at DMA200. Friday low was below 61.8 of the entire latest up swing.

DAX is also in the 10-month range, like we can see more clearly on lower charts.

Same like on US markets - INABILITY to make a Bullish setup, like spring below former Supports, can lead lower, which in this case is bottom end of the range.

Nothing out of the ordinary would that be - since it ALRADY did that in May, July, September, October and December last year.


FDAX Weekly


First of all, check that Weekly candle, which REJECTED the attempt to make new ATHs.

Yes, that one, from three weeks ago. Now - WHY would you be bullish with that kind of candle? That one was a reason for CAUTION. Then we go on lower timeframes, for setups.

Not holding 61.8 = it can go to the bottom end of the range.


FDAX Monthly

I am showing this chart from April 2021. Ten months later, where is the price?

Still in the range. ONLY TAILS are above 16,000 or below 15,000.


IF we get a down move, note that nothing much of a volume or time was spent in the 15,100-14,800 area, and that 14,800 is THE most important level on large timeframes.

What could happen if 14,800 is lost? First that untested breakout at ~14,200 comes to mind, but let's talk about that when and IF there is a chance for that. For now - price is still in the range.



2) Data and Earnings next week



a) DATA


German Flash and Services Manufacturing PMIs, on Monday.


No doubt, that the most important scheduled data will be FOMC Statement, with FOMC Press Conference on Wednesday. On Thursday - US Advance GDP q/q.


A word about news - from "Principals and Psychology of Day Trading", by George Slezak:



So, when market is going down, every news is bad. Remember that, and don't expect buyers until the dust settles, or real reversal is present.



b) Earnings season Jan 24-28 2022


USA - notable companies

Monday - IBM

Tuesday - Johnson and Johnson, Verizon, Microsoft

Wednesday - Boeing, AT&T, Intel, Tesla

Thursday - Mastercard, MacDonald, Robinhood, Visa, Apple

Friday - Caterpillar


EYES are like always on FAANGs + MSFT + NVDA + TSLA.

Netflix reported first, out of this group - last week - and was down 20%,


Germany - SAP on Jan 27th (Thursday)


A word about Earnings for DAX: Although DAX is now DAX40, first 8 companies by Index Weighting, present more than 51% of total weight. Good or bad Earnings report of Linde, or SPA, or Siemens... and some small company is not the same. Small companies Earnings Reports can't move the index, only if all are bad or all are good. Pay attention IMO only on big companies.


First ten DAX40 components, by Index Weighting:




For Day-Trading, you can check my Tweeter feed, where I post charts, setups and trades.


Don't be Johnny-comes-lately, learn the USUAL tricks that markets are performing.

Thousands of charts with false breaks and setups are available on twitter.


For Subscribers of DAILY DOSE OF DAX Service:

Check Setups Gallery every week.

We have 25 MONTHS or every single day for DAX marked.


Cheers,

Relja