1/3/23 Kick Off The New Year—A Warning System


On Friday, markets opened in the red and sank through the trading session. Major indexes were off by about 1%, with one hour of trading left in the year.

Image from Freepik

Then in the final hour, stocks reversed.

All 4 indexes closed in the red but near flat and at the day’s highs…

  • Dow Jones -0.2%
  • Nasdaq -0.1%
  • S&P 500 -0.3%
  • Russell 2000 -0.3%

Sector Round Up

2 of 11 sectors ended Friday in the green.

The winners…

  • Energy (XLE) +0.6%
  • Communications (XLC) +0.0%

No sector declined more than 1%. At the bottom…

  • Utilities (XLU) -1.0%
  • Real Estate (XLRE) -0.9%
  • Materials (XLB) -0.7%


The S&P 500 remain in consolidation.

Markets can move in one of three directions, up, down, or sideways. This morning we’re watching to see how the sideways trend breaks…

SPY Daily Candles – Chart via thinkorswim

The longer the consolidation, the bigger the move you can expect when a breakout or breakdown occurs.

This morning futures are sharply higher.

But our signals are mixed…

Our outlook has been bullish, and without a clear reason to change, we are reiterating our bullish stance.


Today is the first trading day of 2023.

5 of 7 days of the “Santa Rally” are in the books. At Friday’s close, the S&P 500 is up 0.5%.

  • The average return for the Santa rally is +1.3%
  • It runs through tomorrow

An Early Warning System

If the S&P 500 ends the first five trading days of the year with gains 83% of the time, the market posts a positive year.

Last year the S&P 500 ended the first five days down 1.9% … It ended the year down 19%.

When the first five days end red, about 50% of the time, the year ends in the red.

We’ll be tracking this signal along with the Santa Rally.


*Low Float
^Open Position

*KALA on watch
*EVER support at $13.50
*NINE support at $14
PDSB on watch
CABA support at $7, resistance at $10
FREQ on watch
SMMT support at $4
TERN support at $9
ORMP resistance at $12
ORIC support at $5, resistance at $6
ETNB support at $12
RNA support at $22
GLYC support at $2.50
^CROX support at $104
^PRQR support at $3
VKTX support at $8.60
WVE support at $6.50
AQMS on watch
ALLK support at $8
CPRX support at $18
TGTX support at $10
ARDX support at $2.50
WDH support at $3
IQ support at $5

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