Equity markets are slowly fighting back after what has been a rough few months.

As it stands now the SPX has retraced 50% of the losses we saw in the big sell-off in the lead up to Christmas.

There is a classic V-shaped bounce and turnaround, which we often see. However, now that we have sold off and rebounded, we might very well be going into a period of consolidation.

Generally we do see big turning points around earnings season and that is still playing out over the next few weeks.

As such I expect a period of consolidation before we make another clear move in either direction.

So far today the ES is down-0.55% after the holiday period.

Technical Outlook

The SPX is holding 2600 which has been an important level. Now the attention turns to 2700, which is basically the 50% retracement.

S2 is now 2500, with R1 at the 2700 level.