The stock market is reacting to some media stuff about China’s DeepSeek AI model, which is tanking Nvidia, and thumping Tech as a whole, and pressuring the broad market. Ah, inflammatory news items, you gotta love ’em.
The bottom line is it is an excuse to “SELL SELL SELL!” right after Cramer’s latest unwitting (or was it witting?) signal last week. Unbridled bull, indeed.
This is also conveniently unwinding interest rates, which will put pressure on the US dollar, as rates and the buck have mostly correlated positively. Here is the 10yr, up to the minute, pulling back by 2%.
Here is USD dropping below the SMA 50 and grinding support hard (basis for that support are the 2022 highs, not visible on this chart).
As for the stock market, here is a look at the NQ, which is getting hammered.
Trends are still up for NQ, ES, etc., and with Treasury yields dropping with a weak USD, I would not be surprised by a sentiment reset that serves to fuel the bull again, probably with some internal gyrations toward the more anti-USD markets/assets.
But for this morning, it’s a reactionary move. This move will either start a bear market (less likely), or refresh the over-bullish sentiment profile we noted in #846, in prep for another up-surge. I am going to keep managing as if to the IRA’s chart I show each week.
If it breaks down from the nose of the Triangle I’ll consider defaulting toward keeping the uptrend going, technically. But my guess is this is hype moment that will not kick off a bear just yet. Trump2 is sure to include many days like this, up or down.
