Stock Markets tumble; The great tech fake-out – Nasdaq and US Index Outlook

• US Stock Benchmarks led a striking fake-out ahead of Nvidia earnings before taking it all back in today's action
• The Tech Sector is bleeding despite record numbers for the AI Leader
• Exploring Technical Levels for the Dow Jones, Nasdaq and S&P 500

What a fake-out in the Stock Markets.

It hasn't been easy to find any clarity in recent price action, and today marks yet another sign of why.

Nvidia just posted immense earnings, beating all records by a wide margin, with $68.13 billion in revenue for Q4, a +70% y/y increase in earnings.

Despite also exceeding expectations, the AI Chip designer is tumbling in today's session, down 4.00% and even extended below 5% at its trough.

(A bounce from its 50-Day MA is currently ongoing – Keep a close eye on such flows)

Check out this resume to learn more.

I warned of some short-covering ahead of the earnings yesterday, but that is a precise execution of the adage: "Buy the rumors, sell the news."

The drop is also dragging other Semiconductor equities, with Broadcom (-6.50%), Micron (-4.70%), and AMD (-3.70%) bleeding, and the rest of the sector bleeding.

Markets are bouncing timidly from the session lows, with the Nasdaq retesting 25,000, down close to 1.50%, while the Dow Jones remains unchanged.

A proof of the recent turn in narrative: AI is priced to be a disruptor for Markets. The revolution is inevitable, and while current demand is set to exceed all expectations, anxiety about its impact on existing businesses is turning into fear.

What if a reassignment of funds from the tech sector triggered a cascade of bankruptcies in a heavily leveraged industry? The doom scenario is still quite far off, and U.S. indexes are still less than 10% from their all-time highs.

The final round of US-Iran talks is also just restarting. Expect to receive some news promptly.

Let's look at the technical situation by diving into today’s session charts and key trading levels for the major US indices: the Dow Jones, Nasdaq, and S&P 500.

Read More:

• The Dollar attempts a breakout amid US-Iran diplomatic exchanges – US Dollar Index (DXY) outlook
• Markets Today: Nikkei clears 59000, Gold holds high ground, FTSE 100 prints fresh highs. US jobless claims up next
• Chart Alert: WTI crude oil bullish flag in play above $64.15 as US-Iran talk looms

The drop in semiconductors really spreaded to the entire Market as October flows look to be picking up again.

Check out throughout the session to see if this spreads to a wider Market correction, for now, we'll check out intraday charts to get some clues.

The Dow is now turning lower after a volatile open, failing to retest 50,000.

Immediate support comes at the 200-Hour MA but looking at the strength of the selloff (and Oil picking up), it could be difficult to spot a rebound here.

If prices extend below 49,350, expect a cascade of profit-taking and a fall back towards 48,000 towards the Month-End (especially if US-Iran talks fail).

Dow Jones technical levels for trading:

Resistance Levels

• Morning highs 49,850
• January ATH Resistance 49,500 to 49,700 (rejection)
• 49,900 to 50,000 Resistance (Range Highs)
• Index All-Time highs 50,512

Support Levels

• Key 1H MA 49,390 – Bearish below!
• Major Pivot – 49,000 to 49,200
• Past week Support 48,640 to 48,750 (Past week test)
• November ATH 48,300 to 48,500 Minor Support
• Key Support from 47,500 to 48,000 (Next main Support)
• 45,000 psychological level (Main Support on higher timeframe)

Nasdaq sent dark signs in this morning action, rejecting the 25,500 resistance and now looking to retest its 200-Hour MA after a faint rebound (24,881).

Any hourly close below would confirm the profit-taking, which could extend back towards 24,000 for month-end (tomorrow).

Nasdaq technical levels of interest:

Resistance Levels

• 25,400 to 25,500 Key intraday resistance
• 25,000 Pivot Level
• All-time high resistance zone 26,100 to 26,300

Support Levels

• 24,881 200-Hour MA Immediate support and Morning lows
• 24,500 to 25,600 Key Support (Range Support)
• February Support 24,150 to 24,200
• October - November Support 23,800 to 24,000
• Early 2025 ATH at 22,000 to 22,229 Support

The S&P 500 formed its own double-top in this morning's action. Watch how traders react to oversold levels being reached on shorter timeframes.

Crossing below its 200-Hour MA (6,873) will also act as a sign of further selling to expect in Stock Markets. Look around 6,750 for Month-end if the mood really turns sour.

S&P 500 technical levels of interest:

Resistance Levels

• Previous ATH Resistance 6,945 to 6,975 (testing)
• Current ATH 7,020
• All-time High Resistance 7,000 to 7,020 (range highs)

Support Levels

• Key Pivot Zone 6,880 to 6,900
• Current Range intraday Support 6,820
• Mini-Support 6,830 to 6,850
• 6,800 Psychological Support
• February lows 6,730 (Higher timeframe range lows)
• 6,400 Major psychological support

Safe Trades and keep a close eye on the US-Iran developments!

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