Equity trends from August remain bullish but yet remain lower than recent peaks from mid-November on 11/11/24. Tuesday’s stabilization is suggestive of a bounce in US Equities between now and next week’s Thanksgiving holiday. Treasuries also seem to be turning higher, and it’s thought that both Treasury Yields and the US Dollar might retreat into December following the unraveling of the so-called “Trump trade”. Whether or not NVDA’s Earnings call results in the stock moving higher or not on Thursday is unclear, yet initial results seemed unimpressive given the lack of a meaningful upside surprise from expectations. If/when Technology cannot mount any larger rally into next week, then markets might show further consolidation into early to mid-December, which would line up with cycle projections and recent lackluster breadth. At present, without knowing the effect of NVDA’s earnings on its share price for Thursday, a rally seems to be underway into early next week.
NVDA’s earnings and revenues seemed to show a marginal “beat” on Wednesday, yet guidance seemed to be largely in line with lofty expectations, which resulted in a minor drop in the stock in the after-market. (The earnings call awaits, which is thought to be more important.) (For those wishing a lengthier analysis of NVDA’s technical, kindly review my technical report from last night, 11/19/24.) Overall, the degree of lagging behavior lately in Technology is certainly a concern and will continue to be on front burner as a gauge for Equity index gauges at a time when Equities are showing a bit more volatility than investors expect this time of year.
However, with regards to ^SPX -1.67% , it does look to trend up into early next week and likely fill the gap from last Thursday which could carry SPX initially to 5942, or above to near 5954, or 5982.
However, the shape of the wave structure on this move coupled with negative cyclical projections and lackluster breadth makes me a bit wary in expecting an immediate push back to new highs.
Increasingly, technicals seem to show the possibility of a rally into Thanksgiving which then turns down into early to mid-December. I’ll monitor in the days to come to gain a better idea of when this could materialize, but the cycle projections of NVDA seem to follow suit with the SPX forecast for a possible early December pullback ahead of a higher runback.
Overall, for those wishing to manage risk using technical analysis, the most important area on this SPX chart lies at 5853, approximating the intra-day lows from last Friday. This cannot be broken technically without expecting a move down to 5600-5650 and potentially 5500.
A move of this sort might test the uptrend extending from October 2023 lows which intersects August 2024 lows. At present, forecasting a move from here is uncertain until/unless 5853 is violated. However, this is a possible scenario that cannot be ruled out at this time.
Thereafter, a push back towards November highs should unfold in the back half of December. For now, a strong rebound looks necessary which proves broad-based in order to avoid prices turning lower into mid-December. While the intermediate-term trends remain bullish, the near-term view is choppy and would turn bearish under 5853.
S&P 500 Index
Specifically, the following are problematic on a three-week basis:
Technology has remained in consolidation mode since July and has been lower over the last month. Until stocks like AAPL and MSFT begin to act better, and potentially NVDA delivers on earnings, trends for Tech remain neutral in the short run.
Market breadth remains decidedly mixed, not bullish. One would think that following the Election, a sharp rally back to new highs would have ensued. This did happen, of course, yet it was marked by far lower breadth than anticipated.
Elliott-wave structure seems to show a completed five-wave decline from November 11 on hourly charts in IWM -2.93% , DIA -1.86% , S&P Futures, and NASDAQ Composite. This should mean that a counter-trend snapback is due between now and next week’s Thanksgiving holiday. However, it also means that another “wave” down is possible from 11/27 into the first week of December.
Cycle composites for SPX show a declining trend from mid-November into mid-December before a lift into year-end. I expect this either bottoms on 12/5-6, or 12/15.
Overall, while the intermediate-term prospects for SPX, and NASDAQ remain bright into next year, I don’t suspect that it will prove to be an easy final seven weeks higher for the US Equity markets.
NVIDIA cycle composite looks quite bullish from mid-December into next June. However, this could have a downward bias in the weeks ahead
Short-term NVDA cycles, similar to that of the SPX, both show the possibility of a decline in price between now and mid-December. For those new to these projections, these cyclical composites measure amplitude, not magnitude. (Thus, the turning points tend to be more important than the depth of any given cycle (i.e., this doesn’t imply a retest of 2024 lows)).
However, it is correct to point out that when measuring the shorter-term cycles since 2016, NVDA’s short-term cycle does show the possibility of weakness into mid-December before lifting back to highs.
Technically speaking, as I discussed last night, weakness would require a violation of $137 to expect any sort of material drop in the stock. Furthermore, it would be likely that the area from $125-$131 should provide strong support on weakness. Overall, while not knowing the implications of the Earnings conference call, I’ll say that any weakness into December needs to hold $137, which is important given NVDA’s influence within Semiconductors and within SPX.
Under that level, a move down to $125-$131 support might be likely. Conversely, any positive comments regarding Blackwell’s demand from Wednesday night’s call, which positively affected the stock in Thursday’s trading, would suggest a rally up to $150, with movement above this level leading briefly to $157.
NVDA Cycle
Gann’s Mass Pressure index seems to suggest weakness into mid-December, lining up with other Cycles
While just one small piece of the puzzle, time-based measures such as Gann’s Mass Pressure index chart show SPX to likely trend down into mid-December before any bounce back to highs.
This directly lines up with my own Cycle composite, which has a bearish bias into/until 12/7 with the possibility of 12/15.
I’ll certainly respect the current trend until it shows otherwise, but this Mass Pressure chart did have some success in bottoming in early August and indicating a bounce for SPX. Moreover, this also showed an October bottom that helped the index lift higher into November at a time when most were pessimistic, given the geopolitical conflicts and the US election.
S&P 500 Index
Natural Gas looks to be breaking out and should trend up until February
Interestingly enough, the daily charts of the generic Natural Gas futures contract have just broken out of a lengthy consolidation period for the first time since October 2023.
My cycle composite on Natural Gas shows a positive daily cycle composite into February 2025 followed by a steep decline into end of year.
While the weekly cycle composite is currently bearish, the daily composite shown below should allow for a bounce in Natural Gas between now and next February over the next few months before turning back lower.
After February, both daily and weekly cycles suggest downward pressure for the balance of 2025.
While UNG 1.66% is a tricky vehicle to consider to participate in the price movement of Natural Gas given the futures roll (and others like BOIL are even more difficult) I do expect UNG to reach October 2024 highs potentially on this bounce, which lie at $16.80. Additional resistance is found near $21.
Overall, while Crude oil seems to point lower in 2025, Natural Gas looks to have a brief push higher in the months ahead before it also starts to turn down.
Natural Gas Cycle
