Market at a Turning Point: Support Break Threatens Trend Shift

$HOOD $NVDA $MSTR $PLTR $GLD $SLV $USO $URA $IBIT

Hello everyone,

Tough day in the markets. The S&P 500 opened near our posted resistance of 6,755 (from last night’s report), immediately sold off, broke the inflection point and even broke our critical 6,584 support level, and nearly tagged the 100-day moving average.

We saw a decent bounce — a good spot to take profits — but once 6,755 and yesterday’s inflection point failed, disciplined trade/risk management became critical.

Right now, nothing looks bullish on the chart. We may get a short-term bounce (possibly to ~6,680), but with the 10, 20, and 50-day MAs overhead and the 10-DMA already below the 20-DMA (soon below the 50-DMA), the path of least resistance remains lower.

To regain a clearly bullish trend, we need a convincing close back above 6,800. Until that happens, chasing short-term high-beta and tech names is very risky.

Today’s sell-off was triggered by stronger-than-expected NFP data, which decreased the chances of lower interest rates in December FOMC to 27% and on top of that the Fed Governor Lisa Cook’s warned that historically elevated valuations across equities and corporate bonds could lead to sharp declines. We warned about this overvaluation risk we highlighted in Sunday’s letter (read it here).

SPY and QQQ are both sitting right on their 100-DMAs. A clean break below those levels would open the door to significantly more downside. Many individual stocks are also at make-or-break support right now — we’ll show those key charts HOOD, IBIT, MSTR, NVDA, and PLTR below.

We’ll also dive into updated analysis on Gold, Silver, USO (oil), and Uranium.

Let’s get into it!