Market Insights: MLK Day Analysis and Trading Strategies (E61)

Happy Martin Luther King Jr Day! Today is full of events as we navigate through the political landscape; we have Trump’s inauguration, and consequently, the market is closed, creating a pause in trading activity. SPY has a couple of gaps to fill at 582 and 593, which might spark interest among traders looking to capitalize on potential movements. As we look ahead, we can expect the market to drop at open tomorrow, followed by a probable recovery as Trump begins his term, which historically can lead to increased volatility. In the Crypto space, the situation has been going bananas, especially following Trump’s release of his meme coin, which is currently trading at 47.97, resembling a classic pump and dump phenomenon coupled with high gas fees that investors are grappling with. BTC, for instance, is currently above 100k, trading at 104k, but there’s a looming possibility of a pullback as traders reassess their positions after the recent highs. As far as interest rates go, they seem to remain unchanged, ranging from the high 6s to mid 7s, a reflection of the broader economic situation we face. Furthermore, inflation data has come in lower than expected, which is a positive sign for the economy; however, expectations around rate cuts still appear grim, leading many to speculate on the Federal Reserve’s next moves. This week, keep an eye out for important economic indicators, such as jobless claims, S&P Global PMI, and Existing Home Sales for December, which will provide further insights into the health of the economy and may influence market sentiment.