Donald Trump’s second inauguration has markets poised for potential volatility.

Key areas to watch include stock market movements, bond yields, and the US dollar’s strength.
Pro-business policies could boost market sentiment, but uncertainties around trade wars and tariffs loom large.
Bonds may see higher yields if inflation expectations rise, and global markets will focus on his trade stances with key partners like China.

Investors will closely monitor his inaugural address for policy clues and be ready for fluctuations.

Markets around Martin Luther King Jr. Day show a mixed pattern.
The Friday before tends to be positive, while the Tuesday after often opens weaker.
Midweek trading sees notable DJIA dips, especially on Wednesday and Thursday, likely influenced by MLK Day’s proximity to options expiration week.

Traders should be cautious, as this period has been historically volatile since 1999. In 2024, the holiday marks the 28th observance of Dr King’s legacy, a time to reflect on civil rights while navigating post-holiday market uncertainties.

Patience is key as trends solidify.

The Dotcom Bubble (1991–2002) saw tech valuations skyrocket on the back of hype and speculative investment.

Overvalued companies with weak fundamentals flourished, leading to massive market gains before crashing.
Causes included overvaluation, easy venture capital, and media-driven FOMO.

Lessons? Focus on business fundamentals, avoid speculative hype, and learn from history.

The SPX Tag ‘n Turn system thrives on back-and-forth price swings, perfect for the current well-defined range.

Despite recent widening volatility and evolving patterns, clarity is emerging. By shifting focus from Bollinger bands to range highs and lows, trading opportunities become clearer.

With less guesswork, the setup is primed for smoother, profitable trades.

The SPX continues to evolve its price patterns, shifting from a double bottom to a triple bottom, and now resembling a downsloping range.

Currently sitting at the 6000 range high with a base near 5800, the market invites range-bound trading opportunities.

Using the “Tag ‘n Turn” approach, I’m playing this range while keeping an eye on potential breakout scenarios.

Forecasting price movements is tricky – there’s always a 50/50 chance of being wrong! SPX is retesting the daily head and shoulders (H&S) pattern, and a break below the right shoulder could confirm a move to the bearish targets of 5700 and 5610.

With $ADD at a bullish extreme, the case for a bearish continuation is strong. The evolving price action highlights how yesterday’s patterns can shift into something new today.

It’s a waiting game to see if the bears take control.

SPX rallied to retest the consolidation base, leaving us at a critical juncture.

Two scenarios are in play: continuation of the bearish breakout with targets at 5700 and 5610, or a range reversal climbing back to range highs.

The 5850 level is key to determining which way the market hops next.

The Santa Rally failed to show, and January’s bullish hopes are stalling as SPX breaks lower.

Patterns on the 30-minute chart evolved into bearish formations, with the daily head-and-shoulders confirming a breakout.
With overnight futures already down 50 points, the bearish breakout targets are 5700 and 5610.
A trending move south could provide opportunities to compound profits while offsetting prior bullish trades that missed their targets.

In 1720, the South Sea Bubble became one of history’s most infamous speculative disasters.

Founded to manage Britain’s national debt and exploit South American trade, the South Sea Company whipped up a frenzy, promising immense riches.
Shares skyrocketed 700%, only to crash 85% by October.

The company’s valuation briefly surpassed Britain’s economy, leaving thousands bankrupt when the bubble burst.

Corruption, greed, and easy credit fueled the mania. In the aftermath, reforms were introduced, but the South Sea Bubble remains a stark warning about the dangers of unchecked speculation.

The U.S. added a whopping 256,000 jobs in December, smashing expectations and dropping the unemployment rate to 4.1%.

This strong jobs report rocked markets, sending Treasury yields higher, with the 30-year yield topping 5% for the first time in over a year.
The Fed’s rate cut narrative is fading fast, with some analysts now debating potential hikes instead of cuts.
Stocks, however, retreated as markets grappled with the implications of a resilient economy and stubborn inflation. The 2s10s yield curve reached its steepest point since 2022, while gold surged over 1%.

Here’s what this means for traders.