Now that Non Farm Payroll, FOMC Meeting Minutes, and PMI numbers are behind us, what lays ahead? We will trade what we see not what we think. We will rely on market structure and support and resistance. The first dip of January is (historically) bought and generally rallies to mid-February. So we will focus on relative outperformers for this stretch on the calendar.

As the market struggles to find direction and follow-through it makes sense to look at the catalysts that could help clarify what is next. In this case it’s Non-Farm Payroll, FOMC rate hike expectations, and the financial stock earnings. The indices are not in up or downtrends; the equities are in chop. This is a notoriously difficult market to trade for many, but it does not have to be. I walk you through how to see the choppy environment and then how to recognize the actionable levels.

The NASDAQ and Dow have been in chop while the S&P tries to hold onto a fresh uptrend and the XLK ETF is also holding on to it’s uptrend (I explain the importance of this in the video). The choppy market accelerated lower today on the FOMC Meeting Minutes and seasonally there is a quick pullback early in January before resuming the uptrend. Let’s take a look at why I am still bullish but why we need to decode chop with the Slow Stochastic.

The catalyst could be tomorrow with the FOMC Meeting Minutes. Using that as the reason for a bounce from an oversold level in the ZN 10-year futures, I walk through the specific setup and pattern that needs to trigger to validate the buy and where the upside target would be.

In this update I walk through the seasonal tendency for January as well as the sites and habits that will help you find trades this year. All of these are things I check each and every morning allowing me to see the volatility hot zones coming each week and the trends that they are occurring in which in turn helps my select the best indicators and setups for my trades.