Market Analysis and Key Levels Amid Earnings, Economic Data, and Holiday Trading | November 27, 2024
Jobless claims came in at 213,000, essentially in line with expectations and historically low. This indicates no major disruptions in the labor market and reflects stability in the economy. The more critical focus today is on the PCE data release, the Federal Reserve’s preferred inflation gauge, which could drive market movement at 10 a.m. Eastern. Markets are closed tomorrow for Thanksgiving and will reopen Friday for a half-day session.
Market Overview
The S&P 500 remains near all-time highs, though price action is slightly constrained. A wedge pattern is forming, and the trendline from October 2023 has been broken. The S&P is now trading below this line and retesting it from the underside, creating a subtle yet significant risk of a downside break. However, the overall uptrend is still intact, with an upside target of 6100, coinciding with key technical levels. Watch for a retest of 610–612 on the SPY.
The NASDAQ 100 is lagging slightly behind the S&P. While the S&P achieved new highs recently, the NASDAQ has yet to follow. Weakness in key players like Nvidia and other AI-related stocks, such as AMD, is a contributing factor. Nvidia is particularly under pressure, trading near pre-market levels of $135 and heading toward significant support in the $131–132 range. Failure to hold this zone could signal further downside.
Semiconductors (SMH) showed relative weakness yesterday, trading lower despite broader market strength. This warrants attention, as semiconductor performance often leads broader market trends.
Key Stock Levels to Watch
1. Nvidia (NVDA):
• Testing support at $131–132. A breakdown here could open the door for further declines.
• Near-term resistance resides around $140–142.
2. Apple (AAPL):
• Testing resistance near $237.50. A confirmed breakout could lead to a rally toward $245–247, but the stock faces significant resistance in this range.
3. Dell (DELL):
• Following earnings, the stock has confirmed a bearish flag breakdown. Support lies near $115–116 with additional downside possible if this level fails.
4. Autodesk (ADSK):
• A sharp earnings-driven drop highlights resistance at $275–276, which aligns with key Fibonacci retracement levels.
5. Workday (WDAY):
• Earnings miss pushed the stock to $235 pre-market. Strong support exists near $231–223, offering a potential bounce zone.
6. Hewlett-Packard (HPQ):
• Down nearly 7% post-earnings, trading near $36. Support emerges around $34.50–33.50, offering a layered entry approach for potential reversals.
Crypto Assets
Bitcoin continues to hold key support at $91K, with upside potential targeting $100K. A break below this critical level could trigger a deeper correction toward $74–75K. Recent buying activity from institutional players underscores their long-term confidence, though the market has shown signs of short-term exhaustion post-buying.
Commodities
• Gold: A bearish tone persists as recent price action suggests the formation of a potential bear flag. Downside targets include $1,850–1,800.
• Silver: Continues to underperform, with a likely test of $28 in the near term.
• Oil: Trading within a tight range of $65–75, with no clear breakout signals.
• Natural Gas: Significant support resides lower, offering a more favorable entry upon further declines.
Broader Themes
Holiday trading tends to favor a neutral to positive bias due to reduced institutional activity. Retail investors generally lean bullish, and lighter volumes can magnify directional moves. However, the market’s lofty valuation leaves little room for error, particularly as we approach year-end and economic data remains in focus.
Tactical Approach
The current market environment requires disciplined entries, particularly near well-defined technical levels. Layering into trades is prudent to manage risk while capitalizing on volatility. Focus remains on high-probability setups, backed by key Fibonacci retracements, trendlines, and pivot points.
The markets are at a critical juncture, with lofty valuations facing the dual pressures of economic data and earnings reactions. While the S&P 500 maintains its uptrend, cracks are forming in key sectors like semiconductors, signaling caution. Traders should focus on high-probability setups, respecting critical support and resistance levels while remaining adaptable to potential reversals.
