US Equity trends remain choppy, but bullish, and both SPX and QQQ look to be stabilizing near key support, which likely can lead to a bounce next week. Friday’s reversal looked important following the second day of sharp weakness, and the rebound helped many important Technology stocks like NVDA, MSFT, AMZN, and GOOGL close well up off their lows after early losses. Sentiment polls like AAII, meanwhile, showed bearish percentage readings at nine-week highs, which speaks to the sense of unease in this Equity market despite any evidence of trend damage. Overall, I expect that a bounce should be forthcoming after a difficult start to November, and NVDA might serve as the catalyst for a market rally. As always, given the ongoing breadth deterioration, it’s important to watch for any evidence of trend damage, and this would happen on a break of November lows. As discussed yesterday, the areas of SPX 6631 and QQQ-598.68 are paramount to hold. Until/unless these are violated, it’s right to be bullish and simply use this recent consolidation as a chance to buy dips.
As seen below, ^SPX looks to be making the same bullish Friday reversal that happened this time last week. Following some early weakness after an early decline, ^SPX managed to reverse sharply off early lows. This is encouraging following a choppy week of consolidation.
It’s important now for ^SPX and QQQ 0.01% to make a strong rebound off these levels without any further backing and filling. As discussed, the areas at ^SPX- 6631 and QQQ 0.01% -598.68 look important and should not be violated in order to keep this recent uptrend intact.
While I am bullish for a December bounce, it’s hard just yet to make a strong case that a push back to new highs should happen right away. Breadth remains a problem for this market for the bulls, yet sentiment figures look remarkably subdued and are growing worse this week despite any material break in trend. Given November’s stellar track record historically, this should make for a compelling case to buy dips during this seasonally good time.
The key lies with NVDA 1.70% earnings in my view, as this stock has weakened in a manner similar to ^SPX and QQQ 0.01% in the last week and lies near important trendline support. Given that this represents 8% of the ^SPX and more within QQQ 0.01% , an earnings beat that surpasses Wall Street expectations should help to bring about the much-anticipated bounce into December.
As shown below, the ^SPX trend has not been broken despite the recent pullback this week. However, it’s critically important that price now begin to scale higher sharply and not hover around these levels in a manner that would result in additional momentum deterioration.
Regaining 6869, the area near this past Wednesday’s highs, looks important to help momentum and the very short-term structure start to improve in the near-term.
S&P 500 Index
AAII data shows nearly a 20% spread now between Bears and Bulls, favoring the Bears
Interestingly enough, despite no material trend damage, the percentage Bears in the AAII survey jumped to a nine-week high at 49%.
That’s nearly an 18% spread between Bears vs. Bulls and shows the degree that a sudden uptick in volatility can have on an Equity rally that’s been largely symmetrical and bullish for months.
While the slope of this rally has flattened out a bit in the last month, the technical trend for ^SPX remains positive with no material trend damage. Thus, I feel like buying dips is the correct strategy in this seasonally positive period unless monthly lows are violated.
TSLA plunge this week has not broken the uptrend from April
Many investors expressed concern when TSLA 0.48% began to retreat this week following what appeared to be a failed breakout above early October highs.
The violation of the 11/7 lows of $421.88 was certainly important as the stock had been holding within a range for the past six weeks following the fast rise in early September.
However, a few things are important to mention when examining this stock:
- The structure of the pattern from October is not bearish from an Elliott perspective. This merely looks like an ABC-type corrective pattern, and the three-wave decline from 10/2-10/10 helps to confirm this thinking. (Thus, wave B pushed up into early November, and Wave C down looks to have played out since 11/3.)
- This entire consolidation from October also fits within an uptrend that started this past Spring. Thus, the rapid breakout in September was similar (but even quicker than the rise from April into late May) and resembled this former rally. Then the consolidation pattern from October has also been similar to the move from May into August in grinding sideways. The key message here is that no material damage has been done to this pattern despite some slowdown from early last month.
- TSLA 0.48% ’s uptrend remains intact from April, and prices got down to near the first 38.2% Fibonacci area of support of the April-October rally, but held Ichimoku cloud support and also has held above former highs, marking the entire Summer consolidation from late May into September. Thus, a similar message to the prior point #2: No material damage has occurred.
- At present, the decline in the last week has caused many popular gauges of momentum to turn negative in the short term, despite positive intermediate-term momentum. It’s important for TSLA to reclaim the areas that were broken (in this case, $421.88 is the first area, then to exceed its downtrend line from early November). Recovering this recent damage would add conviction to the idea of a push back to test and exceed $474, the area from 11/3 peaks, which is now important on the upside.
Overall, I see TSLA 0.48% as being highly attractive here from a risk/reward perspective. No technical damage of any magnitude occurred this past week, and this looks to represent a “Wave 4” type ABC consolidation from an Elliott perspective, which should be followed by a sharp rally back to new highs. If/when $474 is exceeded, I expect a rally up to $600 at a minimum.
Tesla, Inc.
Quanta Services (PWR) – Recent churning equates to a buying opportunity
PWR 0.56% looks attractive technically following the stock’s minor consolidation following its breakout above July 2025 highs. While PWR 0.56% has shown two minor weeks of decline in November, this hasn’t served to break the uptrend from April 2025 lows. Furthermore, momentum (based on gauges like RSI -0.63% ) has retreated to neutral levels given the last few weeks of sideways price action.
While any break under $404.51 would serve as a warning sign regarding possible deterioration into December, I am skeptical that this happens technically and anticipate stabilization here, followed by a rally higher into year-end. The ability to recover this week’s highs at $456.86 should help PWR 0.56% rally up to $483. This level approximates an alternative Fibonacci-based projection of the rally from April to July, projected from early September lows.
While I don’t anticipate this in 2025, intermediate-term targets lie near $558, which should serve as resistance on continued gains and appear like a possible 2026 target. Overall, momentum gauges like MACD remain positively sloped on weekly charts, and there hasn’t been sufficient trend damage to avoid PWR 0.56% . Its uptrend remains intact and gains look likely in the months ahead, with only a monthly break under October lows at $404.51 serving to change the larger trend from April 2025 lows.
Quanta Services, Inc.
