S&P 500 and Nasdaq Technicals
Monday opened with a strong rally, then turned sideways and choppy. On the E-Mini S&P 500 daily chart, the last three candles (excluding the current one) form a morning star pattern, which signals a reversal to the upside. The sequence: a sharp drop Thursday, an indecision candle Friday that held the 200-day moving average, then Monday's move that recovered at least 50% of Thursday's loss. That completes the morning star, a bullish read.
The volume-weighted average price (purple on the chart) still acts as resistance and is the key level today. To gain confidence, the index needs to close above that anchored VWAP measured from the year-to-date lows. If CPI beats street expectations, a break above that level matters.
On the Nasdaq, tech had a strong day Monday but stopped right at its 200-day moving average. The move up was good, but a lot of technical damage remains to repair over the next few days. Headlines over the next 24 to 48 hours will decide whether the market breaks down further or recovers recent losses and returns to new all-time highs. I am skeptical of Monday's bounce, even though volume was relatively strong.
Nvidia (NVDA) Investigation
Nvidia (NVDA) CEO Jensen Huang admitted to an affair with a suspected Chinese spy. Both the Nvidia (NVDA) board and the FBI are investigating. President Trump raised it during a press conference Monday. The allegation: Nvidia (NVDA) moved about 240,000 H100, H200, and A100 GPUs into China, or shipped them to Singapore so China could use them. That charge is being brought against the suspected spy by the FBI, so the probe will take time. Shares have moved lower over the last few trading sessions.
Two risks stand out. First, keyman risk, flagged by Dan Ives in a morning post: shares could fall further if Huang is replaced as CEO, and there is no clear successor. Street and investor chatter puts the chance of his removal at roughly 15%, with a high probability he stays on, though he must clear the board investigation. Second, regulatory risk: if sanctions were violated willfully or knowingly to give China GPU access, that carries penalties.
Trump currently appears to be on Huang's side, which may feed into the politics. The trading action Monday, with money rotating out of Nvidia (NVDA) into other names, gave some confidence the market could hold up even if Nvidia's (NVDA) leadership is shaken up. Huang is still acting as CEO. The board did not suspend him during the investigation, which is the usual response in cases like this. That choice itself signals something.
There are also calls for Huang to appear before Congress, and shareholders are angry.
Oil Prices
Crude is pulling back, near $90 a barrel on Brent, which briefly traded below $90. WTI is below $85. The market is growing optimistic about a possible short-term deal, one that would not include everything both sides want but could push some items across the finish line over coming days and weeks.
The conflict shows a stalemate in the back-and-forth strikes. The Strait of Hormuz still sees heavy tanker activity being hit, and the US keeps striking key Iranian sites, including radar and launchers at places like Kashm. Trump's tone has shifted since the election.
WTI, diesel, and gasoline are falling. On the weekly chart, WTI broke down from an upward flag pattern. The 50-period moving average (yellow) now acts as support around $82.90. A break below that opens the way to about $75.50. Winter months mean demand slides somewhat, which can pull prices lower. Any global economic slowdown would also push prices down. Bears have more control over oil in the near term than bulls, and a further breakdown could be ahead.
Trading Levels and CPI
Today's S&P 500 range runs from 7630 on the upside to 7430 on the downside, a wide range. The VIX sits at 20, which suits traders and investors hunting for opportunities, and implies roughly a 1.25% move in either direction. The key is getting above both the 200-day moving average and the VWAP; that would confirm a short-term bottom for the S&P 500. Any reversal can bring volatility. CPI is due at the bottom of the hour, and volatility is expected around that report.
