Wednesday, January 2, 2019

SPX and INDU: A New Year

As those of you who own digital watches are no doubt aware, the new year is officially upon us, with today marking the very first trading day of 2019.

Market Watch ended 2018 by publishing a headline that declared 2018 to be a "miserable year," which I thought was pretty funny, inasmuch as SPX lost less than 7% for the year -- which is not at all what many past investors would have considered "miserable."  In fact, even recent history speaks to Market Watch's hyperbole, inasmuch as just to match 2008-09, SPX would need to fall to around 1500 or so.

Anyway, on the chart front, Monday offered another near-term sideways grind, but it's worth noting that INDU is basically pinned between two long-term trend lines that seem to be attempting to declare their relevance:

Early on Monday's session, it appeared bears had taken the near-term ball, but the market managed to forestall resolution of that until the futures open today.

In conclusion, futures suggest we'll open lower, but -- for the reasons outlined on the chart above -- bears will need to keep pushing after that to regain control of the next higher time frames.  Trade safe.  And Happy (belated!) New Year.

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