Ivanhoff Capital

MarketSurge powers the charts in this video.

  QQQ and SPY bounced to their 200-day moving average, which also coincided with their VWAP (volume-weighted-average price) since their all-time highs. Then, Trump announced new tariffs and the market began a new leg lower. Gold and Chinese stocks initially held better than the rest, but even they pulled back on Friday. We might have reached the point of widespread liquidation, where people will just sell to raise cash or hide in Treasuries. The only green stocks on Friday came from the defensive utilities and consumer staples. The market is sending a clear message. A trade war with the rest of the world is likely to lead to an economic slowdown which is not priced yet. Even if that recession doesn’t happen, the market is going to overshoot and discount it anyway.

The next potential support level for QQQ is 450; for SPY is 540. I think they will test them next week and then we could see a more sizable bounce towards their 20-day moving averages. Nothing goes straight down. The market is especially choppy during corrections and bear markets. Obvious breakdowns are often followed by sharp snap-back rallies to declining 20, 50, or 200-day moving averages. I don’t know if the indexes are in a bear market or if this is just another typical 15-20% correction we see every year. Bear markets are often clear only in hindsight. My definition of a bear market is a prolonged stay under a declining 200-day moving average. The most recent example is 2022. I don’t know if we are due for another one so soon but I will remain open-minded to the possibility of it. I have been through enough market cycles to truly believe that no price is too low during a bear market drop and no price is too high during a bull market. 

China and gold have held much better than the rest of the market during the correction in the past six weeks but even they are vulnerable to forced and panic selling. I still think Chinese-related ADRs are likely to be among the leaders when the indexes have their next multi-day bounce but prepare for some market volatility before that.

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MarketSurge powers the charts in this video.

    The Nasdaq 100 has printed two back-to-back bullish reversal weekly candles. Seasonality is turning bullish. Higher-volatility momentum stocks like HOOD and PLTR are starting to outperform again. All of these factors might lead to a relief bounce. I can see QQQ testing 490. If it goes above 490, it could test 500.

What is the bearish scenario? Another failed bounce attempt near 485 and then a quick break below 473 that could lead to another leg lower to 450. There are enough arguments for the bearish scenario as well. MU, FDX, and NKE beat estimates and gave warnings about their future earnings potential due to global uncertainty and tariffs. I suspect many companies will use the same excuse when their time comes to report earnings. In the meantime, the Fed kept the rates the same last week. They continue to expect only 50bps buts for the entire 2025. This won’t change unless the economy slows down significantly which means that the Fed is not going to be proactive.

The tape has been choppy lately. Trending moves haven’t lasted for more than a day or two for many stocks. I’ve adjusted my approach by taking quicker profits. It would be a nice pace of change if we see longer trending moves, so we can capture multi-day swings.

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You can find my trading books on Amazon here.

Disclaimer: Everything I share is for educational and informational purposes only and it should not be considered financial advice. Read my full disclaimer here.

MarketSurge powers the charts in this video.

The S&P 500 and the Nasdaq Composite are down 8% and 11% since their all-time highs. This is nothing alarming. The average SPY’s annual drop is about 14%. And yet, the declines in momentum leaders have been substantial. TSLA is down 50% from its all-time highs. At some point last week, NVDA was down 30% but managed to recover ⅓ of that. PLTR is down 30%, HOOD -41%, APP and RDDT are down 44%. VST is down 40%, VRT – 44%. GOOGL, AMZN, AAPL, and MSFT are down about 20%. MSTR and COIN are down about 45% from their 52-week highs. These are numbers that you typically see after prolonged corrections. The current one is only four weeks old. The drop has been steep and quick as tariff wars threaten growth, employment, and inflation. Without the Fed stepping in or the White House providing more clarity on their economic policy, the market will probably get spooked even more. If I had to choose, I would rather see another leg lower because this would set up the foundation for an epic bull market later this year or maybe next year. The more likely scenario is that calmer heads will prevail and we will see some form of a rally.

In the meantime, gold broke out to new all-time highs. Gold miners ETF, GDX is close to making a new multi-year high. Chinese stocks continue to gain ground. Most of the momentum stocks setting up above their 50-day moving average are currently Chinese ADRs.    

Try my subscription service which includes a private X feed with option and stock ideas, emails with concise market commentary, real-time market education, the Momentum 40 list of market leaders, and much more. See what subscribers say about my educational service.

Check out my free weekly email to get an idea of the content I share with members. How my ideas/alerts did.

You can find my trading books on Amazon here.

Disclaimer: Everything I share is for educational and informational purposes only and it should not be considered financial advice. Read my full disclaimer here.