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SOXX shed 4% at one point after my post, as I expected. I think there'll be good short opportunities in ES1! and NQ1! over the coming sessions.
I think there will be further downside after this bounce as the market rotates from AI into non-AI trades, as evidenced by SOXX staying flat while the indices rally hard.
Read the market, then revisit the source.NVDANVDA
For those who took the trade when XAUUSD was below 3.9K and XAGUSD was around 49, a tight stop is paramount. If we do enter an equity bear market, a cross-asset liquidation would be inevitable, gold included.
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QAREF42
Reference notes remain publishable without a market quote.
QAREF42
Market references: AAPL ES1! PLTR NQ1! · —.
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ES1! rebounded overnight to retest key resistance at 7,660 from below and has stalled precisely at the level I gave the other day. NQ1! is testing a similar resistance line around 28850.
The market has bounced a little from Friday's bloodshed. Friday's levels are pivotal, as several key assets and indices tested their respective support that day.
AAPL and PLTR report after the close today, and the election is tomorrow, with a Democratic sweep expected. Price action over the next few sessions will be particularly important in deciding the path forward.
Bonds have rebounded sharply from the swing low where I called for a rebound.
I expect this rally to end in the coming weeks if not days. Once it does, we should see the positive correlation between oil and yields resume, putting further pressure on equities.
Given the overall technicals, if the market can't rally over the next few sessions, it will become exponentially harder to keep it from entering a bear market.
GDX has now filled all the gaps it left in August, just as I expected.
XAUUSD fulfilled my prophecy on Friday by trading below its July low and is now below the key 3.9K-4K support zone.
Note that a strong LT trendline sits just below spot. Just as importantly, XAGUSD is trading close to its generational support around 48, which has been in place since the 1980s.
A bounce from here is highly likely. XAUUSDXAGUSD
Depending on the macro backdrop, however, gold could break below that LT trendline and find stronger support around 3.4K if the Iran war drags on and we continue to see no progress toward a peace deal. Like gold, silver also has another major support below its current 48 support, in the sub-40 area.
Tick Tock......
CL1! BZ1!
SOX price action during the dot-com era has predicted almost every swing low and swing high for us since SOX topped in June.
And SOXX generational resistance line since the GFC has also marked multiple swing highs and lows over the past few months.
"This time is different."
No, it's not.
It's all just the same thing, over and over. We can't help ourselves.
And you and I can't control it, or stop it, or even slow it, or even ever so slightly alter it.
We just react.
And we make a lot of money if we get it right, and we get left by the side of the road if we get it wrong.
The data center trade is also sitting right at key support. DTCR
Meanwhile, SPX is hanging on for dear life at key support. NDX, the most AI-heavy index, has already broken cleanly below key support.
As I mentioned the other day, broad market breadth has remained fine in the past few weeks despite tech weakness, as the RUA Russell 3000 has shown. Yesterday, however, it slid and tested its horizontal support again. This is a very important level to watch. If it breaks, the unwind will no longer be contained to AI but will spread to the broader market.
