Brief Summary
This video provides a market analysis, focusing on key levels and potential movements in the S&P 500 (SPX), Nasdaq (QQQ), Oracle (ORCL), Broadcom (AVGO), and Bitcoin. It highlights the importance of specific price points, volume profiles, and market breadth indicators. The analysis also covers the impact of upcoming economic data and earnings reports, as well as a critical look at news regarding Nvidia's chip sales to China.
- Key levels in SPX and QQQ are identified using anchored volume profiles.
- Oracle and Broadcom are analysed, noting institutional activity and potential earnings impact.
- Bitcoin's bearish pennant pattern is discussed, with a potential price target identified.
- Market breadth is assessed using the McClellan Summation Index, alongside concerns about VIX and MOVE indices.
- A critical perspective on Nvidia's chip sales to China is presented, questioning the positive market reaction.
SPX and Key Levels
The speaker discusses the S&P 500's (SPX) performance, noting that it played out as expected. He emphasises the importance of a value high area, identified using an anchored volume profile from a recent peak. This level acted as resistance around 10:15, leading to a pullback. The speaker advises viewers to apply this technique to their charts to monitor this level. The point of control was held, indicating support. A break below 6834.75 may signal a problem.
QQQ Analysis and Wednesday's Impact
The analysis shifts to the Nasdaq (QQQ), highlighting the 626 level, which was accurately predicted. Similar to the SPX, an anchored volume profile is used to identify a value high, where the price was rejected. The point of control held, but the speaker stresses the importance of getting through Wednesday, with its dot plot, Fed speeches, and potential Fed cut. The speaker points out the significance of holding the 626 level and the potential for further rejection.
Oracle's Trading and Institutional Activity
The speaker examines Oracle's (ORCL) trading activity, noting the morning run-up followed by a dump. He highlights an undercut that scared many traders, followed by institutional buying around 2:00 PM, a key time for institutional involvement. The speaker describes trimming his position on the way up and blowing it out at the end of the day for a small profit. The importance of watching for divergences and previous close levels is emphasised.
Broadcom (AVGO) and Bond Market
Broadcom (AVGO) is discussed, noting its all-time highs going into earnings on Thursday. The speaker views AVGO and ORCL as looking "absolutely fantastic". He then addresses the bond market, suggesting that rising yields reflect uncertainty due to mixed economic data and the timing of potential interest rate cuts. The dollar's inability to hold is also mentioned as a contributing factor.
Bitcoin's Bearish Pattern
The analysis turns to Bitcoin, identifying a textbook bearish pennant pattern. The speaker explains how to measure the potential move from this pattern, projecting a target around the 67 area. He suggests watching for a break of the pennant, which could lead to an undercut and a flush of traders. Micro Strategy is noted as trying hard to hold, displaying an abandoned baby pattern, which often marks a bottom.
Market Breadth and VIX
The McClellan Summation Index is used to assess market breadth, noting that it's lifting and showing stronger breadth compared to previous highs. The speaker likes using the moving average on the summation index for signals. However, he expresses concern about the VIX, which broke down to 15 but is now back over 16, indicating potential resistance and exhaustion in the market. The MOVE index is also mentioned as jumping, requiring monitoring.
Small Caps and Semiconductor Sector
The speaker advises watching small caps, as they underperformed. He notes exhaustion in some names and highlights the strength in the semiconductor sector (Sox). Taiwan Semi is breaking out due to being at capacity.
Nvidia and China Chip Sales
The speaker provides a critical perspective on news that Nvidia can sell H200 chips to China. He points out that China had already banned foreign chips from state-funded data centres in November, including Nvidia. He suggests that this news is being used to "paint the tape" and create a false sense of optimism. The speaker anticipates that Nvidia and Taiwan Semi may initially rally on this news but could sell off later as the reality sets in. He warns viewers to be aware of this dynamic and potential for retail investors to be dumped on.
