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Trends & Analysis
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Trends & Analysis
News

Goldman Sachs shares surge after earnings beat

News

Keep an eye on these key S&P 500 levels

News

US big banks report better-than-expected earnings

News

Crude oil declines on profit taking

News

Delta Air Lines shares crash despite earnings beat

News

GBP spikes ahead of major economic data

Asset Watch

January jitters for the S&P 500?

Friday, January 5, 2024

The New Year began on a sour note when the S&P 500 sunk on Jan. 2. And with January usually one of the worst seasonal months of the year, more downside could be on the horizon.
The S&P 500 rallied by more than 6% in January 2023, but that followed a nearly 6% drop in December, resulting in a recovery from the prior month’s weakness.
In contrast, the S&P 500 recorded red monthly candles in January 2021 and 2022 after green candles materialised in December. The current setup is quite similar, so the optimism witnessed last month may help facilitate a correction this month. The vertical blue lines show how the previous years’ price action unfolded.

If the green-to-red connection occurs again, a pullback near 4,600 could be the extent of the damage. It’s common for assets to retest breakouts, and after eclipsing the key level in December, a correction could help reset sentiment and set the stage for the next leg higher. As a reminder, CNN’s Fear & Greed Index still had an “Extreme Greed” reading on Jan. 2, as the metric only declined by four points from its recent high.

 

It’s also worth keeping in mind that while U.S. Treasury yields have risen recently, the fundamental fuel of lower interest rates uplifting risk assets has cooled somewhat.

 

Will a healthy correction be the main story this month, or will the S&P 500 hit a new record high before February?


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