Geopolitical concerns could continue to weigh on stocks in the week ahead, leaving investors wondering whether Middle East tensions will be the catalyst for a much anticipated market pullback.

Stocks sold off Friday, the second trading day of the year, after a rally to new highs on Thursday. The market was slammed after the U.S. killed Iranian military commander Qasem Soleimani, sparking a rally in oil prices and raising concerns Iran will take some retaliatory action.

The S&P 500 ended the four-day week at 3,234.85, with a loss of 0.2%, after Friday’s 0.71% decline. Treasury yields retreated on Friday, as buyers moved into the safety of bonds and the 10-year yield was at 1.78%.

The big event in the coming week is the December employment report, expected to show 160,000 payrolls were added and average earnings rose 3.1% year-over-year, according to Refinitiv. The jobs report is especially important after December's ISM manufacturing data. Friday was surprisingly negative and the weakest in more than a decade.

Plan A : Long if market supported firm above 3225.25. Targets are 3240.75, 3251.75 and 3262.25.

Plan B : Short if market failed to support above 3225.25. Targets are 3210.25, 3199.25 and 3188.50.

U.S. stock-index futures fell after last week’s killing of a top Iranian military commander by a U.S. drone in Baghdad damped investors’ appetite for riskier assets.

S&P 500 Index futures contracts expiring in March were down 0.3% as of 2:45 p.m. E.T. Futures on both the Nasdaq 100 Index and Dow Jones Industrial Average declined 0.3%.

The Nasdaq managed to remain barely positive for the week despite a decline of 0.79% (or about 71 points) to 9020.77. The indices came into the session solidly higher for the week after starting 2020 yesterday with a nice rally, which included gains of more than 1% for the Dow and Nasdaq. But last night, we received news that the U.S. killed Iran’s top military leader in an airstrike.

With tensions already on the rise between the U.S. and Iran after our embassy was attacked in Baghdad, this action had the market worried about retaliation and a continued deterioration of the two countries’ already strained relationship.
 

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Plan A : Long if market supported firm above 8792.50. Targets are 8825.25, 8858.50 and 8883.50.
Plan B : Short if market failed to support above 8792.50. Targets are 8752.50, 8719.50 and 8688.50.

HSI

Hong Kong stocks reversed gains to end lower on Friday, as investors worried about heightening geopolitical tensions in the Middle East after a U.S. air strike at Baghdad airport killed a top Iranian commander.

The Hang Seng index fell 0.3%, to 28,451.50, after climbing as much as 1.2% to a six-month high.

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WTI Crude

Oil prices jumped 1% during Sunday night trading-building on Friday's gains as tensions in the Middle East escalated over the weekend.

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Plan A : Remain buy as long as oil price stays firm above 63.2

Plan B : Exit below 63.0

Plan C : Consider selling if oil price fails to hold firm above 63.9

Plan D : Cut above 64.3

Gold

Safe-haven assets rallied Friday after the U.S. killing of a top Iranian general sparked fear of a broader conflict that could disrupt energy production and drag down the global economy.

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Plan A : Remain buy as long as gold price trades firmly above 1556.7

Plan B : Exit below 1552

Plan C : Consider selling if gold price surges but fails to breach above 1591

Plan D : Cut above 1592

Disclaimer: This information is intended to assist professional investors. News are credit courtesy of Reuters, Nasdaq.com, Bloomberg, CNN, Market Watch, FT.com, the Star online, forbes.com and CNBC. The information does not constitute investment advice or an offer to invest or to provide management services and is subject to correctaysion, completion and amendment without notice.As with all investments, there are associated risks and you could lose money investing. Prior to making any investment, a prospective investor should consult with its own investment, accounting, legal and tax advisers to evaluate independently the risks, consequences and suitability of that investment.