The opinions expressed in this report are those of Inspirante Trading Solutions Pte Ltd (“ITS”) and are considered market commentary. They are not intended to act as investment recommendations. Full disclaimers are available at the end of this report.
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Highlights
Upcoming economic events (Singapore Local Time):
Date |
Time |
Venue |
2025-01-14 |
21:30 |
U.S. PPI (Dec) |
2025-01-15 |
21:30 |
U.S. CPI (Dec) |
2025-01-16 |
21:30 |
U.S. Retail Sales (Dec) |
2025-01-17 |
10:00 |
China GDP (Q4) |
2025-01-17 |
09:30 |
China Industrial Production and Retail Sales (Dec) |
2025-01-24 |
11:30 |
BoJ Interest Rate Decision |
Market snapshots
Figure 1: E-mini Nasdaq 100 Index futures
The Nasdaq is on the verge of breaking down from a Descending Triangle pattern, having formed consecutive lower highs since December last year, signalling increasing bearish pressure.
Figure 2: Nikkei 225 (USD) Index futures
The Nikkei 225 appears to have completed a 10-month Continuation Diamond pattern. On a shorter timeframe, it is breaking out from a well-defined three-month rectangle range.
Figure 3: Corn futures
Corn prices have decisively broken out of a six-month Ascending Triangle pattern. The subsequent retest of the breakout level, which now becomes the key support, underscores the bullish continuation setup.
Figure 4: Natural Gas futures (Weekly)
Natural gas prices rallied sharply in response to extreme cold weather in January across the U.S. The price action is approaching a critical resistance zone, suggesting a potential breakout scenario.
Beyond the charts
Before his swearing-in ceremony, President-elect Donald Trump made several bold statements during a press conference at Mar-a-Lago, addressing Greenland, the Panama Canal and even Canada, a critical U.S. ally and trading partner. He also heightened rhetoric against Hamas in relation to the Israeli hostage situation in the Middle East.
While the feasibility of these claims and promises is up for debate, our focus is on market sentiment. Is the initial post-election “sugar high” giving way to a sense of unease about the next four years? The president-elect’s love for social media during his first term, a memory that could be resurfacing for some, has set the stage for volatility.
U.S. equity markets, particularly in tech and AI, have delivered stellar returns in recent years. For many, this might be an opportune moment to take profits and reassess risks, particularly in light of the potential volatility stemming from Trump’s isolationist “America First” policies. The critical question is, where will capital rotate as investors adjust their portfolios? Rotation, we believe, will be a central theme this year.
Within equities, some investors might seek opportunities in regions with lower geopolitical risk exposure and more attractive valuations. Japan stands out as one such destination. Beyond equities, commodities could experience significant inflows. Energy and agricultural commodities, in particular, have been unloved and under-owned following prolonged declines. Factors such as extreme weather, geopolitical tensions and the potential impacts of various tariffs could spark a sustained rally in these sectors.
From ideas to actions
We conclude with the following hypothetical trades:1:
Case Study 1: Long Nikkei 225 (USD) Index futures
We would consider taking a long position in the Nikkei 225 (USD) futures (NKD) at the current price of 39,860, with a stop-loss below 38,000, a hypothetical maximum loss of 39,860 - 38,000 = 1,860 points. Looking at Figure 2, if the Continuation Diamond pattern is confirmed, the Nikkei 225 Index has the potential to rise to 46,000, resulting in 46,000 - 39,860 = 6,140 points. Each point move in the Nikkei 225 (USD) futures contract is five USD. Micro Nikkei 225 (USD) Index futures contract is also available at 1/10 of the standard size.
Case Study 2: Long Corn futures
We would consider taking a long position in Corn futures (ZC) at the current price of 456’6, with a stop-loss below 435’6, a hypothetical maximum loss of 456’6 - 435’6 = 21 points. Looking at Figure 3, if the Ascending Triangle bottom reversal is confirmed, corn prices have the potential to reach 505’6, resulting in 505’6 - 435’6 = 70 points. Each Corn futures contract represents 5,000 bushels and each point move is 50 USD.
1 Examples cited above are for illustration only and shall not be construed as investment recommendations or advice. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. Please refer to full disclaimers at the end of the commentary.
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