The first week of the new year started off with a bang and ended with several days of sideways consolidation for a strong +1.8% overall gain for the S&P 500 (SPY). Most industries are technically in short-term neutral territory, with select complexes either overbought (XLY/XLK) or oversold (XLP/DBA).

Under the right conditions this is precisely the disposition that can foster healthy rotation for a steady overall rise. The VIX is a bit bearishly stretched, suggesting some level of caution could be warranted in the week ahead, but in fact it has been in a intermediate-term reversion back to more ‘normal’ 20-30 readings for weeks now.

[Week 2 Calendars: Economic | Reporting]


Source: Mrkt_Commentary subscription service; prior weekly posts.

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