Today’s note is an excerpt from a combined Chart Trades / Opening Look piece from this morning. The full report included three buy ideas (two bullish pattern breakouts and one mean-reverting move), along with market commentary.
One key stat about the SPX is this:
“The SPX logged its second straight 40 bps gain yesterday, but it came on just 38% breadth. The last time the index was up on the day with fewer than 40% advancing stocks was 10/29. Not surprisingly, Technology was the leading sector both days.
The SPX now has had negative internals in four of the last six sessions, which is a trend that will need to shift for the market’s foundation to improve.”
NVDA
Today’s note is an excerpt from a combined Chart Trades / Opening Look piece from this morning. The full report included three buy ideas (two bullish pattern breakouts and one mean-reverting move), along with market commentary.
One key stat about the SPX is this:
“The SPX logged its second straight 40 bps gain yesterday, but it came on just 38% breadth. The last time the index was up on the day with fewer than 40% advancing stocks was 10/29. Not surprisingly, Technology was the leading sector both days.
The SPX now has had negative internals in four of the last six sessions, which is a trend that will need to shift for the market’s foundation to improve.”
We also cited this weekly breakout on 10/8. The breakout zone is the same as the daily pattern breakout above – near 127. As we know, NVDA has made a habit out of breaking through – and extending from – multi-month resistance zones since 2023.
Holding the stock in front of tonight’s numbers is a personal decision, but…
For both charts, the main takeaway is simple – both targets will remain in play if NVDA can stay above the 127 zone. That’s true for tomorrow and the rest of the year, and it’s been true over the last six weeks since the breakout first happened.
Here’s NVDA’s 25-month weekly chart in log scale. The most important part is that the stock has continued to ride the uptrend line that connects the most significant trading lows in 2023 and 2024. The noticeable difference lately is that NVDA has hugged the line over the last few months. That’s in contrast to its prior visits to the line, which led to very strong bounces.
The first 38.2% retracement mark of the entire rally is all the way down at 97. The stock has some leeway before that comes into play.
