To The Moon

The catalyst for Friday’s turnaround emerged from dovish commentary by New York Fed President John Williams, whose remarks suggesting “near term” rate reduction prospects galvanized sentiment following Thursday’s sharp selloff.

Futures markets swiftly repriced the probability of a December policy easing to 75%, jumping from roughly 40% just one day prior. However, this optimism confronts a significant challenge: Federal Reserve policymakers will navigate the December decision without critical October and November inflation and labor data, a consequence of the prolonged government shutdown.

Economic anxiety is further reflected in the University of Michigan’s consumer sentiment index, which deteriorated to 51 in November as concerns over persistent elevated prices and labor market stability intensified.

Underlying the week’s turbulence was a fundamental reassessment of the artificial intelligence investment thesis, where concerns about an AI-fueled valuation bubble overshadowed even exceptional corporate performance.

$NVIDIA(NVDA)$ , the sector’s bellwether, ended Friday slightly negative despite delivering earnings that exceeded expectations on Wednesday. This disconnect signals that robust fundamentals may no longer suffice to support elevated valuations, particularly as investors question the sustainability of current AI spending rates and monetization timelines.

Risk aversion remained evident across speculative assets despite Friday’s equity rally. While the VIX retreated 12.2% to 23.2, suggesting a temporary easing of defensive positioning, cryptocurrency markets continued their decline. Bitcoin extended its slide to trade as low as $82,000, putting the digital asset on pace for its worst monthly performance since the 2022 market collapse. This persistent weakness in speculative corners suggests underlying risk-off sentiment may prove more durable than a single day’s equity bounce would indicate.

Technical Indicators are oversold as presented below, the bounce for the $S&P 500(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $NASDAQ 100(NDX)$ $Invesco QQQ(QQQ)$ happened right at the 20 weekly average in confluence with the weekly levels mentioned above, and the 100 daily moving average, there is fear in the market but the bounce vanished during the afternoon as the charts above present. A bottom must be proved next week with the consolidation of the central weekly level updated below.

Unlock the central weekly level for over 40 securities including NVDA, $Advanced Micro Devices(AMD)$ $VanEck Semiconductor ETF(SMH)$ $Broadcom(AVGO)$. That level is the blue line in the charts above for SPX, QQQ, and IWM that accurately framed the price action for the week that just ended, along with the support and resistance lines.

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