This remains a choppy market for US Equities in the near term as part of stellar ongoing intermediate-term uptrends, which showed no evidence of deterioration despite any of the recent DeepSeek and/or Tariff-related volatility spikes. While I still think that a rally back to new all-time highs might take time for both SPX and QQQ, it looks right to position for the eventual breakout, looking to buy pullbacks if/when they appear in the next 1-2 weeks. Both US Dollar and US Treasury yields likely should be beginning a more serious decline in the weeks to come at a time when sentiment remains subdued. Overall, it’s right not to be complacent until this consolidation has given way to the actual breakout in SPX and QQQ. Intermediate-term trends are bullish, and pullbacks at this point will likely hold at 6000 before pushing up above 6121. Such a move would likely coincide with a move up to 6300.
As seen below, the near-term trend continues to improve, but it can’t be called an official breakout just yet.
While Equal-weighted SPX along with Small-caps have begun to kick into gear over this last week as yields have plummeted, Technology has slowly but surely come back over the last week, with data through 2/5/25 showing Equal-weighted Technology having beaten every other sector in percentage terms outside of Real Estate and Utilities with gains of +2.25%.
This comes on the heels of six of the seven Magnificent Seven companies having reported earnings so far. The results seem to show a picture of earnings that is better than expected, while revenue has disappointed so far (-0.1%, a very small decline). Increased spending and mixed outlooks have also resulted in some short-term volatility for GOOGL 0.04% and possibly AMZN -0.66% after hours. Yet the broader bullish uptrend for the Magnificent 7 is technically intact.
Thus, Technology’s “back and forth” movement in recent months looks to be now turning back higher, which is helpful for SPX.
As shown below, it will take a daily close back over 6121 to have real conviction in SPX having broken out. Following three straight days higher, there certainly could be some backing and filling, but it’s not expected to undercut this week’s lows.
Thus, the prior thinking of a possible retest of January lows has been completely dismissed at this point given the Equity index strength along with breadth improvement, poor sentiment, and evidence of Technology holding where it needed to following January’s underperformance.
I continue to view the near-term price action as mixed and choppy, but I feel the larger move should be that of SPX breaking back out to new highs at a time when most remain fearful of tariffs. The downside is that if/when we see a move to new daily lows, we likely would find strong support between 6000 and 6025.
S&P 500 Index
Amazon EPS beat seems to have offset Cloud disappointment
Amazon shares seem to be shrugging off its lower guidance given a comfortable 24% earnings beat, yet the 4Q net sales of $187.79 billion vs. $187.32 billion (largely in-line) seems to be a common theme among the large-cap Technology and Communication stocks, which have reported lately.
Technically, AMZN remains in stellar shape following its Election-time (November 2024) breakout back to new all-time highs.
This represented a Cup and handle breakout following its first failed breakout attempt last Fall.
Given that this large base since 2021 was just exceeded two months ago, I expect AMZN should be able to successfully absorb any after-market jitters caused by its earnings conference call and start to turn back higher in the weeks to come.
My technical target for AMZN -0.66% over the next 4-6 months lies near $280, and I feel that minor pullbacks would make this quite appealing from a risk/reward perspective.
Amazon.com
TSLA still trending lower but structurally should face some downside exhaustion when/if this reaches the support zone at $340-$350
Unfortunately, TSLA shares look to be failing following just a minor test of prior lows made in early January 2025.
Of the Magnificent Seven names, this seems to have been the company that underperformed all others, with a -5.5% revenue decline and a -3% decline in EPS.
However, following an over 100% gain in the latter part of 2024, its relative resilience in recent months could be something to highlight for the TSLA bulls. I made the following comments on Flash Insights for clients today, but they bear repeating.
The following look to be relevant for TSLA, technically:
1) TSLA just broke early January lows on a close to reaching the lowest levels since early December.
2) Volume expanded on the support violation to three-day highs.
3) The overall extent of the decline from December has not proven too extreme, given the 100% advance in literally two months from late last year. TSLA has given back roughly 40% of that, and the 50% mark is important, which is nearly $350.
4) The Shape of the first move down from 12/17-1/2 was clearly a three-wave decline. (That’s encouraging because even though it’s undergoing a consolidation that’s ongoing, the stock’s entire decline as a corrective move should eventually move back to new highs.)
5) The short-term pattern has been a C wave of the ABC pattern since 1/17 but cannot be called complete despite TSLA closing well up off early lows today.
6) From an Elliott perspective, this looks to be in the 3rd wave of C, which would call for 380 to not likely be exceeded before a “faster” decline, which could take this down near $350.
7) I expect that TSLA likely does bottom within around 2-3 weeks from now and turn up sharply; However at this time it remains within a short-term downtrend with an incomplete pattern and volume which is still far heavier on the downside.
8) Cycle composites call for TSLA to bottom near 2/24 (But maybe this might happen earlier?).
9) Being under $380 on a daily close (and potentially weekly close) with one day left in the week keeps TSLA in a bearish technical position which might have another 25-30 points of downside. My support target at this point lies in a zone anywhere from 331-350, but I will study its structure carefully if/when TSLA gets down to $350.
10) Technically TSLA looks early to buy, but for those that are patient, should bring opportunity within the next three weeks and I believe further decline makes TSLA an attractive risk/reward opportunity.
Tesla, Inc.
NVDA bounce is encouraging, but more work looks to be necessary
Following three straight days of gains, NVDA has risen back to test some important short-term resistance that I would refer to as the “line in the sand” for gains in the short term.
As weekly charts show, NVDA did violate a lengthy intermediate-term weekly 1×1 price/time trendline (1 unit of time per unit of price) and declined on high volume into late January.
Now comes the hard part. If/when NVDA can regain $129.51, this should be important in allowing the stock to recoup both mid-December and mid-January lows, which are important.
While this might take a bit more time to accomplish, I am expecting an eventual breakout for NVDA that helps this push back to new all-time highs. Initial targets lie near $161, then $180.
However, recovering its uptrend line and regaining prior lows of the past month should be quite important in helping trends and momentum turn a bit more positive.
NVIDIA Corporation
NVDA short-term chart shows the stock near the highs of its recent range
The hourly chart shows a completely different story, as the stock is now nearing an area of technical importance.
Ideally, one might suspect a stalling out and minor “backing and filling,” which might result in a decline to $120-$122 before it turns back up to break out of $129.51.
Such a move would result in more attractive technical symmetry, forming an hourly reverse Head and Shoulders pattern that would be attractive to expecting a coming breakout.
However, one also can’t rule out a move straight up above $129.51, which would mean continued gains without much consolidation.
Overall, I’ll respect either scenario, as my intermediate-term technical projection still calls for a move back up to new all-time highs. The next 3-5 days should help to resolve any indecision over a possible near-term stalling out.
NVIDIA Corporation
