Facts
- The S&P 500 futures contract (US500) resumed gains after a sharp sell-off at 15:30 on January 21, 2026.
- The hourly RSI for US500 has moved above 50, and buying volume is gradually starting to dominate.
- Netflix shares are slowly recovering after a bearish open on January 21, 2026.
Recommendation
Long position on US500 at market price.
- Stop Loss: 6185
- Take Profit: 6935
Opinion
Recent declines in US500 have been very strong, but the fundamental backdrop for US equities remains supportive as long as the US economy stays resilient and inflation remains relatively low. A significant portion of stocks has been heavily repriced, making valuations across key Nasdaq 100 and S&P 500 businesses more attractive ahead of the critical earnings season.
Strong results from TSMC, along with solid consumer conditions in the US and Europe, suggest Big Tech earnings may remain robust. At the same time, Microsoft is trading nearly 19% below its all-time high, while Nvidia and Tesla are down by a similar magnitude. Speaking in Davos, Donald Trump said US stock market gains would “double” and warned that fears of inflation in the US and within the Fed are unjustified.
Given the supportive macro fundamentals and ahead of the key US earnings season, we recommend taking a long position in US500 with a target around 6,920 points-near the gap-down opening from Monday, January 19, when the market was pricing in the impact of an escalation in the US-Europe trade war.
Source: xStation5
