SGT Chart Book

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Happy New Year and all the best to our readers for 2024.

A quick message about the chart book:

The intention is to provide some market highlights and hopefully bring to your attention some interesting chart patterns. These are not recommendations to buy or sell any particular instrument.

We have received some favourable feedback from readers over the past few months and will look to develop out some of the ideas that have been requested over the next few weeks/months.

As always, happy trading!

Highlights from a shortened holiday week:

The S&P 500 finished the week down 1.5%, snapping a nine-week winning streak, while the Dow Jones Industrial Average slipped 0.6%. The Nasdaq Composite declined 3.2%.

 

Several of the big tech names that pulled the market higher in 2023 are lower to start 2024. Apple shares slumped 5.9%, hit by a downgrade from analysts at Barclays. Amazon.com shares fell 4.4% for the week, Tesla dropped 4.4%. The so-called Magnificent Seven stocks, which also include Meta Platforms, Micro-soft and Nvidia, accounted for more than 60% of the S& P 500’s total return, including dividends, in 2023.

 

On Friday the latest monthly jobs report showed the U.S. economy added 216,000 jobs in December, more than economists had forecast. At the same time, revisions showed that employers added fewer jobs in October and November than previously estimated.

 

The report did little to clarify when the Fed is likely to begin cutting interest rates. Central bank officials have signaled that they anticipate lowering rates this year, but with fewer cuts than many investors expect.

 

Also released on Friday were weaker-than-expected report on the U.S. services sector. The Institute for Supply Management’s services- activity index fell to 50.6 in December, down from 52.7 in November and below economists’ estimates.

The yield on the benchmark 10-year U.S. Treasury note rose to 4.041%, from 3.990% on Thursday.

USA30 (Dow Jones)

While dips held above the previous highs, we do note Bearish divergencies (price against indicator), we often mention this condition and is not an absolute reason to sell, but something in the toolbox to help the trader access market conditions.

USA100 (Nasdaq)

We notice similar technical conditions here with divergences, After the run up late last year in the tech heavy sector, it’s no surprise to see some profit taking.

USA500 (SP500)

Thing of note here is that while the Dow and Nasdaq made new all-time highs (ATH’s), SP500 failed to do so.

US10-YEAR RATES

A good bounce off over sold market conditions, testing 200-day MA, can’t rule out a further move up into 4.30% area.

EURUSD

Chart shows a most sideways market last year with the blue horizontal line capturing the years high and low. Short term we can see a small up channel that Traders will want to take notice of.

GBPUSD

Dominant feature here is the longer term down trendline on the weekly charts.

XAUUSD

We have used a close only chart that takes the closing rate for each day, this filters out intra-day activity and we can see that while we got a spike higher in Gold last year, its it yet to close above previous highs ...Look left.

XAGUSD

Consolidative theme on this line chart, if we overlay the bar chart you would witness some spike moves above and below the trendlines, False breaks? Lots of traders will use these close only charts to determine major trend changes or reaction at trendline support/resistance levels.

USOIL

Short term price action is dominated by the down sloping trend line.

BTCUSD

Major bearish divergencies on daily charts.

ETHUSD

Red control line holds any dip in market currently, bearish divergences also seen on the daily chart.

Happy trading,
SGT Trading Desk

trading@sgt.markets

Disclaimer: Trading Desk Observations are not trade recommendations. The purpose of these charts is to bring to your attention potential chart patterns you may wish to monitor.

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