NVDA earnings look critical as US Equities near "Make-or-Break"

US Equity trends remain choppy, but arguably have not broken down in a way that should give way to much more technical weakness.  Both SPX and QQQ look to be stabilizing near key support, which could lead to a bounce this week if NVDA earnings do not disappoint. While many investors have started to turn more bearish, the technical trends cannot be considered bearish with prices above October lows in both SPX and QQQ.    Furthermore, Equal-weighted SPX has also not broken down. While market breadth and momentum have been under pressure for the last few months, the combination of cycles bottoming, DeMark exhaustion starting to form, along with Elliott-wave patterns nearing completion, is a reason to buy dips into late November. Overall, I am expecting a bounce vs. a breakdown in the days ahead. However, it remains paramount for a broad-based rally to start to get underway as December nears. Failure to mount a strong rally in December that helps to lift market breadth into year-end would likely prove to be a 1st Half 2026 problem.  For now, I like using recent weakness to buy.

As daily $SPX charts show below, $SPX has pulled back to within striking distance of October lows.   ($QQQ has done this as well.) Market breadth proved to be flat on Tuesday’s setback, which should come as a bit of a relief for market bulls as the strength of the selloff looks to be waning.   Yet, given that momentum continues to grow worse for this market, it’s imperative to mount a quick and strong rally in the days ahead. 

Many market participants have commented that $SPX has now broken its 50-day moving average (m.a.), and that this signals the start of a larger downturn. I do not feel it’s right to use 50-day m.a. as any kind of trading tool, but merely as a guide to market strength. The slope and/or percentage above/below 50-day m.a. have more practical meaning to me than a breakout or breakdown.  Many who traded the markets back from 2022 can attest to the difficulty of making trading decisions when an index like SPX suddenly moves above or below its 50-day m.a. (It proved quite choppy and not really all that satisfying for Bulls nor Bears. Specifically, the period from late 2022 into mid-2023, along with most of 2024, proved to give a plethora of false signals on a break of 50-day m.a.)

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