January 12th, 2024

Bulls are in control. This morning, I’m heading out for our Member/Member Golf tournament here in Naples, FL. But before I head out, I wanted to share a few noteworthy items for today’s trade. Firstly, the ZN has turned neutral to slightly bullish on my charts as they have reclaimed the YTD AVWAP and are attempting to break above resistance at 112’15, which could potentially lead to a new high for the year. This is key after yesterday’s CPI print, which may have made some investors go short on ZN; a squeeze could now be unfolding.

Next, the ES hit a notable low yesterday. In my note, I mentioned that I would turn bearish on ES if it fell below 4772, and it went to that area before reversing course. That’s the YTD AVWAP that held steadfast, suggesting that bulls are now in command and we could be approaching new highs.

The NQ is also stabilizing, as it continues to uphold the YTD AVWAP and the 5-day SMA, along with the daily Bollinger bands beginning to expand outward, indicating a potential shift from mean reversion to range expansion. The only weak area continues to be the RTY, but with ZN pushing upward, I wouldn’t be eyeing shorts in RTY. They’re the rally’s laggard, which makes them an unappealing market to trade in currently. The strength lies in NQ and I would lean towards that market on the long side, along with ES.

As Monday is a market holiday, I’ll see you all back at the screens on Tuesday. Wishing you all a fantastic weekend, and wish me luck in the tournament. Cheers, DELI