Holding Weaker Levels

US equity indexes holding mildly weaker levels on narrow session range for Dow Industrials, SPX and Nasdaq:

• DJIA down 22.41 points (-0.06%) at 35109.66
• S&P E-Mini Future down 3.25 points (-0.07%) at 4501.25
• Nasdaq down 6.9 points (0%) at 14232.97

Bit placid given the sharp swings this month, SPX emini recovery this week back to late Jan 20 levels.

• Several factors to watch: earnings cycle ongoing, winding down by next week: Google earnings after the close today (27.32 EPS est).
• Data risk: ADP private employ data early Wed, Jan NFP Fri to offer more insight as to where Fed policy will head: really strong number not expected due to Covid factors, but would rekindle 50bp hike in March.
• Geopolitical: Russia/Ukraine tensions, recent report of military personnel killed by drone strike on Eastern Ukraine border could dampen risk appetite if reports true and response escalates tension.
• Technicals: S&P E-minis gains considered corrective. Price action in January resulted in a reversal of the moving average condition to bearish. This suggests that short-term gains are corrective.
• Two important resistance levels to watch are; 4521.05, the 20-day EMA and 4578.22, the 50-day EMA. A decisive break of this resistance zone is required to suggest scope for a stronger reversal.
• Flipside: A resumption of weakness would refocus attention on 4121.75, Jan 24 low.