- Traders brace for a cautious start to the year as markets look for direction post-holidays.
- Key technical levels on major indices could signal the next big move amid subdued volatility.
- Economic data and political developments may set the stage for market shifts in the coming weeks.
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The first trading session of the year unfolded with a whisper rather than a roar, setting the tone for what may be another subdued day. Investors are still shaking off the holiday lethargy, with markets likely to find their footing next week as momentum rebuilds after the Christmas lull. Friday’s macroeconomic calendar doesn’t promise fireworks, but the ISM manufacturing report could stir interest.
Initial and continuing jobless claims fell last week, according to a Labor Department report that came out yesterday, reinforcing the strength of the labor market. The data bolsters expectations that the Federal Reserve might hold steady on interest rates during this month's policy meeting.
Looming in the background is President-elect Donald Trump's inauguration on January 20. With the Republican camp poised to hit the ground running on its legislative agenda, markets will be watching closely for any moves that could signal a policy-driven shake-up. Expect heightened sensitivity to headlines as traders assess how new fiscal and regulatory strategies could shape the financial landscape.
S&P 500: Bears Eye Critical Levels
The recent holiday season rally has lost momentum, raising concerns about the sustainability of the uptrend. The S&P 500's key battleground lies near the round 5700-point mark, where strong support could prompt at least a short-term rebound.
However, if sellers manage to break through this cluster, the door opens to further declines, potentially testing the September lows around 5400 points.
A series of weak U.S. economic data could add fuel to this bearish scenario, making a deeper correction increasingly plausible.
Nasdaq 100 Testing the 21,000 Threshold
The Nasdaq 100’s corrective phase has brought it to the brink of the psychological 21,000-point level. A decisive break below this threshold would likely set the stage for a test of the next major milestone at 20,000 points.
On the flip side, if buyers can counter the recent selling pressure, the index may resume its uptrend, paving the way for fresh record highs. Watch for a sustained recovery above 21,000 as a signal of renewed bullish momentum.
DAX: Holding the Line Amid Holiday Calm
Germany’s DAX index remains anchored around the 19,700-point support zone, a level reinforced by the classic principle of role reversal. While the holiday period has dampened volatility, a breakout in the coming sessions could reinvigorate upward momentum.
If the DAX can sustain a rally, the path toward new all-time highs becomes clearer. For now, the market cautiously defends its base, waiting for fresh catalysts to drive a decisive move.
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Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, counsel or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple perspectives and is highly risky and therefore, any investment decision and the associated risk remains with the investor.