This Week's Trade 1/20

The futures market was open overnight Sunday into MLK Day and at first gapped up to the 865 area, but then sold off and closed down around 840. For a low volume holiday session it was quite the range. So what to expect for Tuesday and the coming week?

Looking at the intermediate term using a daily chart to the left I have noticed that last weeks low also coincided with an ambush long that triggered and held the pivotal 815 level. From the lows of November to the highs of January. The fib retracement I have drawn has a first target of 991 on the SPX. If we hold last weeks low then I see no reason why this market cant grind higher in the coming month to reach that target and perhaps even beyond.

For Tuesday, the daily pivot is at 839.25. If we gap up above this area I want to look for long signals to buy the market. If we hold the pivot I think we can continue higher from Friday and maybe get to the gap fill of 866 from last Wed.

If we lose the pivot after gapping down then I want to watch for shorts setting up but I am going into the week with a slightly bullish bias.

Tuesday is Inauguration Day in DC so you should see some high emotion out there. Do not trade with emotion. I dont care if Obama lifts the markets with his speech. Just trade the charts and look for the trend to guide your trading. Not emotion.

Economic data for this week is very light and includes:

Thursday- Building permits, Housing Starts, Jobless Claims.

Overall, we could be setting up for more upside in the intermediate term but it may still be choppy here in the next few days until we get back over the 880 resistance level. Trade safe.