Welcome to the new year and a new reset for January. The 6-month calendar window of January may be more influential than usual.
Let me explain before I show you S&P 500 ETF (SPY) price chart…
After the first 10 trading days of January, a range is established.
That range becomes a guide for the next 6 months until it resets in July. If the instrument clears the upper part of the range before the end of 10 days, the statistical possibility of going higher is more significant.
Conversely, if the instrument breaks the lower part of the range before the end of 10 days, the statistical chance of following a decline is more significant.
If the instrument remains in a trading range, a further reduction can be expected until the range is resolved one way or the other.
We at MarketGauge are particularly focused on this upcoming calendar range because it lines up perfectly with resistance in both price and moving averages.
Here is a chart of SPY on a daily basis.
And for fun, we use gold (GLD) as our benchmark, directly from our ACP Plug-in and Triple Play Leadership Indicator.
We have completed the first 9 days of trading which means until Thursday the 19thththe 6-month calendar interval of January will be defined.
Price, and most likely the top of the entire 10-day trading range, is perfectly aligned with the 200-day moving average (green line).
And price, and most likely the bottom of the entire 10-day trading range, is perfectly aligned with the 50- and 10-day moving averages (blue and cyan lines).
How clean is that?
A break above the price range would also take SPY into a rally phase, clearing the 200-DMA, likely leading to a further decline.
Conversely, a break below the price range would also take SPY into a bearish phase below the 50 and 10-DMAs, likely leading to more downside.
See how SPY is underperforming gold. inflation has reached its peak, you say. Gold vs Spy says otherwise.
Also note that our other ACP Plug-In from Triple Play or Real Motion (momentum indicator) is stronger than both positive slope and cumulative 50 and 200 moving averages.
However, the RM indicator is also at resistance in the Bollinger Band, which could suggest an overbought spy with a mean reversal on the horizon.
Regardless, we’re ready and excited to see which way the January calendar range is resolved.
Of course, there are other factors to look at along with calendar ranges.
And each tool will create a set.
So pay close attention to what happens after the 6-month interval is established.
At that point, you’ll have another reliable metric to track to help you cut through the noise of the talking heads.
Stock market ETFs trading analysis and summary.
S&P 500 (SPY) Closed above 200-DMA, should now stay above and clear 400.
Russell 2000 (IWM) Can it handle 190? Game changer if it happens.
Dow Jones Industrials (DIA) The December high of 348.22 is now approaching.
Nasdaq (QQQ) Confirmed recovery phase and immediate 200-WMA resistance at 281.
Regional Banks (KRE) Still the most worrisome section, with 60 cores and under 57 lights. Must clear 65 to stay in game.
Semiconductors (SMH) Another nail-biter stops right at 50-WMA or 226.
Transport (IYT) Also stopped at 50-WMA or 231.50
Biotechnology (IBB) 138.74 December high, 130 major support to clear.
Retail (XRT) It’s amazing how the January 6-month range and these 50-WMAs match up in the economic modern family. 66.70 for cleaning and storage if good.
The author may have a position in the listed securities at the time of publication. Any opinions expressed herein are solely those of the author and do not represent the views or opinions of any other person or organization..