SGT Chart Book

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The U.S. economy reported another month of mild inflation in December, keeping the Fed on track to deliberate when and how quickly to reduce interest rates later this year. Fed officials are on track to hold interest rates steady at their meeting next week (Wednesday announcement) and could remove from their policy statement language saying the next interest- rate change is more likely to be an increase than a cut.

Last Week

The Fed’s preferred inflation measure, the personal-consumption expenditures price index, was announced on Friday and showed that price pressures remained mostly subdued in December. The personal-consumption expenditures index rose 0.2% from the previous month. was up 2.6% in December from a year earlier.

The U.S. economy grew at a rate of 3.3% in Q4.

The S&P Purchasing Managers Index (PMI) came in higher than expected, with the manufacturing PMI hitting 50.3 in January, well above expectations.

The ECB kept its key interest rates unchanged at record highs and reiterated that monetary policy would stay at “sufficiently restrictive levels for as long as necessary” to bring inflation down to the 2% target.

Investors are playing close attention to economic data that will shed light on whether consumer spending— the backbone of the U.S. economy will continue to stay strong. Consumer spending rose 0.7% in December from the previous month, data released Friday showed.

All eyes will be on data releases next week and Fed announcements on Wednesday.

USD500

A rally in big tech stocks has helped propel the S& P 500 to new highs. A belief that the Fed has successfully slowed inflation without inducing a sharp economic slowdown has helped fuel the trade. Multiple ATH’s reached last week with intraday tests above 4900. Interesting fact that 75% of the USA500 gains this year are as a result of 2 stocks: Microsoft and Nvidia.

USA30

ATH’s seen again last week.

USA100

The AI story is still rampant, with major names reporting earning next week. While Navida has added 27% to market cap this year the laggard is Tesla (down around 25%, See chart below) Interesting that prices failed at the crossing of major resistance on daily charts.

TSLA

US10YEAR RATES

Hanging in after strong data. Consolidating above 200 D Moving Average last week.

EURUSD

Trade down to a low of 1.0815, before small recovery to ween end.

GBPUSD

Still watching weekly trendline resistance. Around 1.2850/60.

USDJPY

US Dollar rally consolidates ahead of channel resistance.

XAUUSD

Hourly charts shows mostly sideways price action for the week.

XAGUSD

Silver consolidates, one thing we know is that it will eventually break out of current “Triangle”.

USOIL

WTI had its best week since September 2023, with its highest weekly close since the first week of November. Continued Middle east tensions are to blame for higher prices.

BTCUSD

After early weakness as suggested in last week’s notes, BTC found support in the $38k area before mounting a rally to reach $42k.

ETHUSD

Early weakness across crypto sector saw move back to major support zone as indicated by red horizontal line.

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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